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 proposed refusal by the Superintendent of Financial Services to make an order under section 70 of the PBA ordering London Life Insurance Company to file a revised partial wind up report with respect to the 1996 partial wind up, due to the reorganization of the company, of the London Life Insurance Company Staff Pension Plan, Registration Number 0343368
73 Anderson Avenue
London Life Insurance Company
255 Dufferin Avenue
Assistant Vice-President , Pension Benefits, Human Resources
Employer and Administrator of the Plan
NOTICE OF PROPOSAL
I PROPOSE TO REFUSE TO MAKE AN ORDER requiring London Life Insurance Company (“London Life”) to prepare and file a revised partial wind up report with respect to the 1996 partial wind up, resulting from the 1996 reorganization, of the London Life Insurance Company Staff Pension Plan (the “Plan”) so as to include Mr. James Harris (“Mr. Harris”) as a former member affected by the partial wind up, pursuant to section 70(5) of the PBA.
- London Life is the employer and administrator of the Plan.
- Mr. Harris is a former member of the Plan who was employed by London Life from March 25, 1974 until January 5, 1996.
- On December 4, 1995, Mr. Harris was given notice that his employment was terminated effective January 5, 1996. As part of the Mr. Harris’ severance package he was provided with salary continuance until January 3, 1997.
- On February 26, 1996, London Life issued a press release stating that London Life was going to restructure its Canadian operations to enhance the company’s competitiveness, to increase growth, and to improve customer service.
- On February 17, 2000, the Superintendent of Financial Services (the “Superintendent”) issued a Notice of Proposal to partially wind up the Plan with respect to all members who ceased to be employed by London Life as a result of the reorganization of London Life’s business or as a result of the discontinuance of all or part of London Life’s business between January 1, 1996 and December 31, 1996.
- London Life requested a hearing with respect to the Notice of Proposal by the Financial Services Tribunal (the “Tribunal”). Public notice was provided of the Tribunal hearing, which was held on December 11, 12, 13, 14, 15, 19, and 20, 2000.
- On February 7, 2001, the Tribunal issued a decision affirming the Notice of Proposal and directing the Superintendent to carry out the Notice of Proposal, subject to the order contemplated in the Notice of Proposal being modified so that it directs that the Plan is wound up in part in relation to those members and former members of the Plan who ceased to be employed by London Life effective between January 1, 1996 and December 31, 1996, as a result of the reorganization of the business of London Life.
- On November 28, 2001, London Life filed a partial wind up report and a revised partial wind up report on October 18, 2002 with respect to the 1996 reorganization. Mr. Harris was not listed in the reports as a former member who was affected by the reorganization.
- On May 6, 2004 the Superintendent approved the partial wind up report filed on October 18, 2002 with respect to the distribution of the basic benefits of the wind up group.
- Mr. Harris has requested the Superintendent to make an order that London Life file a revised partial wind up report that includes Mr. Harris as an affected member.
- There is no evidence that Mr. Harris ceased to be employed as a result of the reorganization of London Life’s business as set out in London Life’s February 26, 1996 public announcement. Mr. Harris was provided with notice of his termination on December 4, 1995, almost 3 months prior to London Life’s announcement.
- The Tribunal states in its February 2001 decision:
In fact, we would have selected the actual date of the announcement,
February 26, 1996, as the commencement date but for the fact that London Life presented evidence that the reorganization actually started in January with the termination of five or six Plan members and, therefore, it agreed that were there to be a partial wind up order against it as a result of the reorganization, January 1, 1996 would be the appropriate commencement date.
- Mr. Harris is not entitled to be included in the partial wind up because his termination was not a result of the1996 reorganization of London Life’s business. Although the effective date of Mr. Harris’ termination of employment was January 5, 1996, he received notice in December 1995, well before the announcement of the reorganization on February 26, 1996. His cessation of employment was therefore not a result of the 1996 reorganization of London Life’s business.
- Section 69(1) (d) of the PBA states that the Superintendent may order a partial wind up where a significant number of members of the pension plan cease to be employed by the employer as a result of the discontinuance of all or part of the business of the employer or as a result of the reorganization of the business of the employer.
- Section 70(5) of the PBA states that the Superintendent may refuse to approve a wind up report that does not meet the requirements of the PBA or that does not protect the interests of the members and former members of the plan.
- Since Mr. Harris did not cease to be employed as a result of the reorganization of London Life’s business, he does not have any interests to be protected with respect to the 1996 partial wind up.
- In addition, the Tribunal has already adjudicated the issue of whether 1995 terminations are included in the partial wind up, and has ordered that they are not so included. As such, the doctrine of issue estoppel applies to this issue.
- 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 416-226-7752, toll free at 1-800-668-0128 ext. 7752, or by fax at 416-226-7750.
IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY CARRY OUT THE REFUSAL DESCRIBED IN THIS NOTICE.
DATED at Toronto, Ontario, this 15th day of May, 2007.
__________________________________________ K. David Gordon
Deputy Superintendent, Pensions
* NOTE: Pursuant to section 112 of the PBA any Notice, Order or other document is effectively 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.