IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c. P.8, as amended (the “PBA”)
AND IN THE MATTER OF a Proposal of the Superintendent of Financial Services to Make an Order under section 87 of the PBA relating to the Eaton Canada Pension Plan, Registration Number 0440396
Eaton Yale Company
c/o Eaton Center
111 Superior Avenue
Attention: Gordon Harman
Manager, Retirement Plans
David B. Cole
P.O. Box 64531
NOTICE OF PROPOSAL
I PROPOSE TO REFUSE TO MAKE AN ORDER requiring the administrator of the Eaton Canada Pension Plan, Registration Number 0440396 (the “Plan”) to pay a pension to Mr. David B. Cole (“Mr. Cole”), under section 87 of the PBA.
I PROPOSE TO MAKE AN ORDER ordering the administrator of the Plan to provide Mr. Cole with a Termination Statement and to refund Mr. Cole’s pension plan contributions, plus interest, under section 87 of the PBA.
Mr. Cole was employed by Canadian Electric Box and Stamping Limited, later known as CEB Limited (“CEB”) and GTE Sylvania Canada Limited (“GTE Canada”) between April 6, 1970 and May 30, 1978.
In May of 1978, Mr. Cole was transferred to the United States where he worked for GTE Sylvania Switchgear Division (“GTE US”), a company related to GTE Canada, until his termination on October 22, 1981.
While Mr. Cole was employed by CEB he was enrolled in the Pension Plan for Employees of Canadian Electric Box & Stamping Limited, registration #0226506 (the “Initial Plan”).
While Mr. Cole was a member of the Initial Plan, he made contributions to the plan totaling $1,852.40, as indicated in T4 tax slips provided by Mr. Cole to FSCO.
The CEB Plan filed with the Financial Services Commission of Ontario (“FSCO”) effective from July 1, 1976, provided for employee vesting once an employee attained 45 years of age and 10 years of continuous service or plan membership.
The CEB Plan text defined “Company” as “CEB Limited or any successor Company”.
FSCO records indicate that GTE Canada acquired CEB effective January 1, 1978.
FSCO records indicate that the Electrical Equipment Division of GTE Canada was purchased by Challenger Electrical Equipment Corp. on November 30, 1983 and was incorporated as Commander Electrical Equipment Inc. and Commander Electrical Equipment Inc. assumed all rights, responsibilities and obligations as sponsor of the Initial Plan.
FSCO records indicate that Commander Electrical Equipment Inc. was purchased by Eaton Yale Ltd. January 31, 1994.
FSCO records indicate that effective January 1st, 1997 the Initial Plan was merged into the Eaton Yale Ltd. Pension Plan for Salaried Employees of Cutler-Hammer Canada Operations, registration #0440396, now known as the Eaton Canada Pension Plan (the “Plan” as defined above).
Following his transfer to the United States, Mr. Cole was a member of the pension plan established for employees of GTE US and has confirmed that GTE US has provided him with confirmation of his pension entitlement under the GTE US plan.
Mr. Cole claims that his years of service with GTE US qualify him for vesting in the Initial Plan.
Eaton is the administrator of the merged plan and has denied Mr. Cole’s claim.
Based on the July 1, 1976 Initial Plan text (the “Plan Text”) filed with FSCO, an employee becamevested after he/she attained the age of 45 years and completed 10 years of continuous service with the company or 10 years of plan membership. At the time of Mr. Cole’s transfer to GTE US in May of 1978, he did not have 10 years of service with GTE Canada and as a result would not have been vested under the Initial Plan.
The Plan Text, consistent with PBA vesting provisions in effect at the time, provided that if an employee did not meet the age 45 and 10 years of service requirement at termination, the employee would not be vested and would only be entitled to a refund of his/her contributions to the Plan, with interest to the date of termination.
The Plan Text defined Company as “CEB Limited or any successor Company.” FSCO records indicate GTE Canada acquired CEB Limited effective January 1, 1978 and became the successor company. There is no documentation on file to support the position that the related GTE US was ever considered a successor company.
Section VII of the Plan Text provided that service in subsidiary or predecessor companies would be considered in determining pensionable service provided that approval was given by the Board of Directors. Based on the information provided to FSCO and that contained in FSCO files, there is no indication of approval being granted by the Board of Directors during Mr. Cole’s employment to have GTE US service recognized. As a result, it appears that Mr. Cole’s GTE US service was not recognized for purposes of the Initial Plan.
Section XVI (b) of the Plan Text provided that an employee’s pensionable service included service with any other company with which agreements were made. Section XVI (d) also provided that when an employee was transferred to or from an associated company there should be an appropriate transfer of assets between the pension plans on a basis approved by the company, provided that the transfer agreement allowed such a transfer.
Based on a review of the documents on file with FSCO, there is no evidence of a transfer agreement between GTE Canada and GTE US relating to the recognition of pensionable service. Accordingly, it does not appear that the GTE Canada Board of Directors approved recognition of GTE US service for vesting purposes under the GTE Canada pension plan.
FSCO records do indicate that on December 28, 1978, the Board of Directors of GTE
Canada signed a resolution recognizing the pensionable service of any person transferred from employment of one division of GTE Canada to another division of GTE Canada (the “Resolution”). In conjunction with the transfer of employment, a transfer of assets would also occur. These transfers required the approval of the Plan Committee Chairmen.
GTE US was not listed as a division of GTE Canada and the aforementioned Resolution was signed following Mr. Cole’s May 30, 1978 transfer of employment to GTE US.
Mr. Cole was not vested under the terms of the Plan Text prior to his transfer to the United States accordingly and therefore he is not entitled to a pension from the Plan.
Mr. Cole maintains that he was never provided with a refund of contributions with interest following his transfer to GTE US in 1978.
Mr. Cole’s claim is supported by copies of his Canadian tax assessment forms for 1978 and 1979 and his United States Wage and Tax Statements for 1978.
At the time of Mr. Cole’s transfer to the United States, the Plan Text provided that employees who had not attained 45 years of age and 10 years of continuous service or plan membership would be provided with a refund of his/her pension plan contributions with interest to the date of termination.
The administrator of the Plan is required to provide Mr. Cole with a Termination Statement in accordance with section 42 of R.R.O. 1990, Regulation 1990 made under the PBA and Mr. Cole is entitled to a refund of his pension plan contributions, plus interest, in accordance with the Plan Text and sections 19 and 63(3) of the PBA.
The administrator has not provided Mr. Cole with a Termination Statement and a refund of his pension plan contributions plus interest.
Such further and other reasons as may come to my attention.
YOU ARE ENTITLED TO A HEARING by the Financial Services Tribunal (the “Tribunal”) pursuant to section 89(6) of the PBA. To request a hearing, you must deliver to the Tribunal a written notice that you require a hearing, within thirty (30) days after this Notice of Proposal is served on you.*
YOUR WRITTEN NOTICE must be delivered to:
Financial Services Tribunal
5160 Yonge Street
Attention: The Registrar
FOR FURTHER INFORMATION on a Form for the written notice, please see the Tribunal website at www.fstontario.ca or contact the Registrar of the Tribunal by phone at 416- 590-7294, toll free at 1-800-668-0128, ext. 7294, or by fax at 416-226-7750.
IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY CARRY OUT THE PROPOSAL AS DESCRIBED IN THIS NOTICE.
DATED at Toronto, Ontario, this 7th day of March, 2008.
K. David Gordon
Deputy Superintendent, Pensions
* NOTE - Pursuant to section 112 of the PBA any Notice, Order or other document is sufficiently given, served or delivered if delivered personally or sent by regular mail and any document sent by regular mail shall be deemed to be given, served or delivered on the seventh day after the date of mailing.