Eibner v. Superintendent of Pensions of Date:, 2014 MBCA 65

Citation: Eibner v. Superintendent of Pensions of Date: 20140616 Manitoba and Tetra Tech, Inc. (formerly Docket: AI 13-30-08062 Wardrop Engineering), 2014 MBCA 65 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : ) T. J. Fry LEONARD JOSEPH EIBNER ) for the Applicant ) ) M. A. Webb (Appellant) Applicant ) for the Respondent ) Superintendent of Pensions of ) Manitoba - and - ) ) A. F. Foran ) for the Respondent SUPERINTENDENT OF PENSIONS OF ) Tetra Tech, Inc.

MANITOBA and TETRA TECH, INC. ) (formerly WARDROP ENGINEERING) ) Chambers motion heard: ) May 1, 2014 ) (Respondents) Respondents ) Decision pronounced: ) June 16, 2014 CAMERON J.A. [ 1 ] Mr. Eibner seeks leave to appeal a decision of The Manitoba Pension Commission (the commission) dismissing his appeal of the decision of the Superintendent of Pensions (the superintendent) refusing to issue an order relating to his pension entitlement resulting from his employment with W.L.

Wardrop & Associates Ltd. (Wardrop), which later became Tetra Tech, Inc. [ 2 ] For the reasons that follow, I would dismiss leave to appeal on the basis that Mr. Eibner’s proposed ground of appeal does not raise a question of law alone, nor a question that merits the attention of the full court and does not have a reasonable prospect of success. Legislative Framework [ 3 ] This motion for leave to appeal and the proceedings which preceded it involve s. 8 of The Pension Benefits Act , C.C.S.M., c.

P32 (the Act ) and, more specifically, the role of the commission and the superintendent under the Act . [ 4 ] The commission is created under the Act , (see s. 4(1) ) and its members are appointed by the Lieutenant Governor in Council (see s. 4(2)). [ 5 ] The superintendent is employed under The Civil Service Act , C.C.S.M., c.

C110, to administer the Act and is the chief administrative officer of the commission ( ss. 7(1) and (2) of the Act ). [ 6 ] The relevant provisions of the Act for the purposes of the motion before me are ss. 8(1) to (3) , (6) , (10) and (11) , which provide: Inspection powers of superintendent 8(1) The superintendent or the superintendent’s duly authorized representative may, at any reasonable time, (

a) inspect the books, files, documents and other records relating to a pension plan kept by any person;

(

b) by notice in writing, require any person to furnish to the superintendent, in a form acceptable to the superintendent, such information as the person has and as the superintendent considers necessary for the purpose of ascertaining whether or not this Act and the regulations have been or are being complied with. Grounds for order 8(2) The superintendent may make an order in accordance with subsection (3) (

a) where a notice is given under clause (1)(

b) and the recipient fails to respond within 10 days from the date of receipt of the notice; (

b) where, in the opinion of the superintendent, a pension plan or the manner in which it is being administered is not in conformity with this Act or the regulations; (

c) where, in the opinion of the superintendent, a person has committed a breach of a provision of this Act or the regulations; or (

d) where the administrator of a pension plan cannot be located or is insolvent and there is no other person to undertake the winding-up of the pension plan. Contents of order 8(3) The superintendent may, by an order made pursuant to subsection (2), (

a) require any person in breach of a provision of this Act or the regulations to remedy the breach without delay or within a specified period of time; (

b) require an employer, administrator or any other person charged with a duty in respect of the pension plan, to take or to refrain from taking a specified action or proposed action with respect to the pension plan; (b.1) require an employer to pay to a pension plan money referred to in subsections 28(1) and (3) (trust for contributions); (b.2) if the employer is a corporation, require a director of the corporation to pay any contributions to a pension plan for which the director is liable under

section 28.0.1; (b.3) for the purpose of an agreement entered into under

section 11, require that the assets and liabilities of a pension plan be split or allocated, or both, where the superintendent considers it appropriate; (

c) appoint a person to act in place of and to perform the duties of the administrator of a pension plan; (

d) assume the duties of the administrator of a pension plan; and the order shall state the reasons for the making thereof. Appeal to commission

8(6) A person affected by an order made under this

section may appeal from the order to the commission, within a period of time prescribed in the order or such further period of time as the commission may allow. Powers of commission on appeal 8(10) Upon hearing an appeal from an order under this section, the commission may (

a) confirm the order as made; (

b) direct the superintendent to vary the order; or (

c) rescind the order. Appeal from commission’s decision 8(11) A person who is a party to a decision of the commission may appeal the decision to the Court of Appeal, with leave of the court, on a question of law or jurisdiction.

Section 36 applies to the appeal, with necessary changes. Facts [ 7 ] Mr. Eibner was an employee of Wardrop between September 9, 1963 and December 31, 1979, when, at age 53, he terminated his employment. His “normal” retirement date was February 1, 1992. As an employee of Wardrop, he was a member of a pension plan titled The Pension Plan for the Salaried Employees of W.L. Wardrop & Associates Ltd. (the Wardrop plan). Based on the length of his employment with, and his age at the date of retirement from Wardrop, the calculation of Mr. Eibner’s pension benefit was governed by

Article XI of the Wardrop plan, which is attached as Appendix A to this decision. [ 8 ] At the time he terminated his employment with Wardrop, Mr. Eibner elected to withdraw a 25 per cent lump sum payment from his pension. He deferred the remaining 75 per cent of his pension until his eventual retirement in October 1991. Since 2001, Mr. Eibner has disputed the calculation of his pension by Wardrop with the office of the superintendent of the commission (office of the superintendent).

Although he has previously raised a number of issues regarding the calculation of his pension benefit before the superintendent and the commission, the issue raised in this motion revolves around his contention that his pension entitlement has been wrongly calculated on a defined-benefit basis based on his termination date of December 31, 1979, rather than on a money-purchase basis based on his retirement date in October 1991. Decision of the Superintendent [ 9 ] Based on his concerns, Mr. Eibner requested an order pursuant to ss. 8(2) and (3) of the Act .

Among other things, those sections allow the superintendent to make various orders in circumstances where a pension plan is not being administered in conformity with the Act or regulations, or, where there has been a breach of the Act or the regulations. [ 10 ] The superintendent refused to issue an order. In her reasons she emphasized that entitlements under a pension plan are in the domain of the plan administrator, who can employ experts and actuaries to assist in the administration.

Moreover, she stated that there was no legislative duty on the superintendent to review and determine members’ pension benefits where there is no breach of the Act . [ 11 ] Notwithstanding, the superintendent stated that her office would attempt to aid in the resolution of concerns respecting entitlements brought forward by plan members and beneficiaries. Thus, the office of the superintendent undertook a review of Mr. Eibner’s pension entitlement and concluded that it had been determined in accordance with the Wardrop plan. Decision of the Commission [ 12 ] Mr.

Eibner appealed the decision of the superintendent to the commission. [ 13 ] The commission defined the issue before it as, “Was Mr. Eibner’s pension properly calculated?” Mr. Morrison (Mr. Eibner’s agent before the commission) argued that, because he and Mr. Eibner worked at Wardrop at the same staff level for around the same period of time, their pensions should be the same. Mr. Morrison relied on various informational documents describing the Wardrop plan, that had been provided to employees, in support of his argument that Mr. Eibner’s pension benefit was wrongly calculated.

He submitted that those documents demonstrated that the Wardrop plan was a money-purchase plan, whereas Mr. Eibner’s entitlement was wrongly calculated on a defined-benefit basis. [ 14 ] Counsel for the superintendent argued that Mr. Eibner’s pension benefit was calculated in accordance with the Wardrop plan. Further, she argued that the Wardrop plan was registered in accordance with s. 21(1) of The Pension Benefits Act , S.M. 1975, c. 38, as amended by S.M. 1977, c. 54 (the 1975 Act ), which was applicable at the time. That

section provided:

Requirements respecting deferred life annuities 21(1) A pension plan filed for registration in accordance with

section 18 shall provide contractually (

a) that a member of the pension plan who has been in the service of the employer for a continuous period of 10 years, for part of which period he was employed in the province, or has been a member of the plan for a continuous period of 10 years, for part of which period he was employed in the province, whichever first occurs, is entitled upon termination of his employment or upon transfer of his place of employment to a place outside the province or upon termination of his membership in the plan prior to his attaining retirement age, to a deferred life annuity commencing in accordance with the terms of the pension plan, as those terms were as of the date of termination of his employment , as though he had continued to be a member of the pension plan and that …. …. [emphasis added] [ 15 ] Further, the situation wherein a lump sum payment is taken, as was the case for Mr.

Eibner, was provided for by s. 21(4) of the 1975 Act which provided: Partial commutation permitted. 21(4) Notwithstanding subsections (1) and (2), where a pension plan so provides, an employee to whom clause (1) (

a) or 1(

c) applies may receive in partial discharge of his rights under the plan as a lump sum, upon or after termination of employment or membership in the pension plan prior to his attaining normal retirement age as defined by the plan, an amount that in total does not exceed 25% of the commuted value of the deferred life annuity prescribed by subsection (1) [emphasis added] [ 16 ] Thus, the superintendent argued, there was no error in the calculation of Mr. Eibner’s pension benefit. [ 17 ] The commission specifically queried about the proper date for the calculation of Mr.

Eibner’s benefits and the matter was adjourned for further argument, which was provided. [ 18 ] After considering all of the factors, the commission dismissed Mr. Eibner’s appeal, stating in part: .… The process for the calculation of the pension is contained in

Article VII and

Article XI of the Wardrop Plan Documents. The formula to determine the pension under the Wardrop Plan is complex with a different formula applicable for service before and after 1974, with various minimum amounts that may also apply. Pension calculations are usually performed by an actuary or actuarial firm due to the complexity of the calculation. The factors affecting the calculation of an individual’s pension include their salary, the member and employer contributions (including the timing of those contributions) and date the pension commences.

To say that two people worked at around the same time and did similar jobs does not mean that their pensions would be the same. All of the above noted factors have to be taken into consideration. Mr. Morrison bears the onus to show that the benefit was not calculated properly. Exhibit 2 shows the basis of the calculation for Mr. Eibner’s pension. He failed to establish a prima facie case that the entitlement in any way violated the provisions of the Wardrop Plan. While he argued that the Wardrop Plan booklets should determine the benefit instead of the Wardrop Plan Documents.

He presented no evidence to support his position.

[ 19 ] It is from the above decision that Mr. Eibner seeks leave to appeal. Issue [ 20 ] It is important to remember that Mr. Eibner’s original request was for an order pursuant to s. 8(2) of the Act . However, there was never any issue raised or argued by any of the parties, including on the motion for leave, as to whether, in the circumstances of this case, the steps taken by the office of the superintendent were within the legislative mandate of the superintendent under s. 8 of the Act . Accordingly, I will not address the point. [ 21 ] Further, while Mr.

Eibner’s amended notice of motion for leave to appeal states that his grounds for appeal are based on the fact that his pension should have been calculated on a “money-purchase basis” as opposed to a “defined benefit basis,” those grounds were never argued. Rather, the argument advanced by his counsel in his motion brief and in oral argument was founded on the assertion that a proper

interpretation of art. XI of the Wardrop plan, leads to the conclusion that Mr. Eibner’s pension benefits were wrongly calculated and should have been calculated as of his retirement date in 1991 as opposed to the date of termination of his employment in 1979. Therefore, I will decide this motion based on the issue as argued in his motion brief and at the hearing before me.

Test for Leave to Appeal [ 22 ] An appeal from the commission to this court is governed by s. 8(11) of the Act . [ 23 ] The traditional grounds for granting leave to appeal were recently affirmed by Scott C.J.M. in Winnipeg Airports Authority Inc. v. EllisDon Corp ., 2011 MBCA 51 , 268 Man.R. (2d) 66 (in chambers).

As a general rule, the following three criteria must be satisfied before leave to appeal will be granted: 1) leave to appeal may be granted only on a question of law or jurisdiction; 2) that question must be one of sufficient importance to warrant consideration by the province’s highest court; and 3) the case must have arguable merit; that is to say, the applicant must have a reasonable prospect of success. Positions of the Parties [ 24 ] Mr. Eibner asserted that the calculation of his pension benefit must commence as of the date of retirement based on his

interpretation of art. XI 1(

b) which provides that a pensioner in the position of Mr. Eibner shall “be entitled to a deferred pension in the normal form commencing at his normal retirement date , whose yearly amount shall be the sum of” four specific calculations itemized in subparas. (

i) to (iv). [ 25 ] In support of his position, Mr. Eibner underscored that each of the calculations listed in subparas. (

i) to (iv) require a computation of “Credited Interest” which is defined in art. IV of the Wardrop plan (attached to this decision as Appendix B as a calculation based on specific factors that are then “compounded annually on the Anniversary Date each year with proportionate interest up to the first day of the month in which the payment is made.” He contended that art. IV of the Wardrop plan makes clear that credited interest is to be applied on the basis that the calculation is made as of the date of retirement. [ 26 ] In support of his motion, Mr. Eibner argued that the issue is one of contractual

interpretation and, therefore, is a question of law alone. [ 27 ] The superintendent asserted that no question of law was raised, but in argument, focussed on the position that the appeal was not of sufficient importance to warrant consideration by this court and lacked merit. Specifically, the superintendent argued that the

interpretation of art. XI advanced by Mr. Eibner was unsupported by the Wardrop plan and contrary to established

definitions and understanding in pension law. Further, the superintendent argued that if the Wardrop plan were to be interpreted in the manner suggested by Mr. Eibner, it would not have been accepted for registration as it would have been contrary to s. 21(1) of the 1975 Act . [ 28 ] Wardrop argued that the issue raised by Mr. Eibner does not constitute a question of law. It argued that the issue before the commission was whether Mr. Eibner’s benefits were properly calculated and that question was one of fact rather than law. Additionally, Wardrop adopted the arguments of the superintendent.

Analysis and Decision [ 29 ] The commission determined that the issue before it was whether Mr. Eibner’s pension was calculated correctly. It determined that it was, as had the superintendent, and therefore dismissed his appeal from her order refusing his request for an order pursuant to s. 8 of the Act . [ 30 ] I agree with counsel for Wardrop that the correctness of the actual calculation of Mr. Eibner’s pension does not raise a question of law alone. At best, it is a question of mixed fact and law. That is, in consideration of the duration of Mr.

Eibner’s employment with Wardrop, its termination, the decision of Mr. Eibner to take a 25 per cent lump sum payment, the terms of the Wardrop plan and the application of art. XI of that plan to Mr. Eibner’s circumstances, the commission rejected the position that his pension should be calculated in the manner he asserts. [ 31 ] While the issue of contractual

interpretation may not have been put to the commission in the same manner as was advanced in Mr. Eibner’s motion for leave to appeal, the issue of whether his pension should have been calculated as of the date of his termination of employment as opposed to his date of retirement was directly before the commission and was, at least implicitly, rejected based on the commission’s reasons in dismissing the appeal.

[ 32 ] Even allowing that the issue of contractual

interpretation may raise a question of law alone, leave to appeal should be denied on the basis that the matter does not merit consideration by this court and does not have a reasonable likelihood of success. [ 33 ] In order for a case to be one that warrants the attention of the court, the issue must be one of importance “not just for the immediate case, but in determining other similar disputes which are apt to arise in the future” Pelchat v. Manitoba Public Insurance Corp. , 2006 MBCA 90 at para. 2 , 40 C.C.L.I. (4th) 46. In this case, there is no evidence that anyone other than Mr.

Eibner contests the calculations performed by Wardrop pursuant to the Wardrop plan. Indeed, the witnesses called on behalf of Mr. Eibner at the hearing before the commission testified that they were satisfied with the calculations of their respective pensions by Wardrop. [ 34 ] Regarding likelihood of success, as was noted by Monnin J.A. in Consumers’ Association of Canada (Manitoba) Inc. et al. v.

Manitoba Hydro , 2005 MBCA 55 , 195 Man.R. (2d) 12 (at para. 12 ): Although the issue of the applicable standard of review is not specifically before me in addressing a leave application, consideration of the applicable standard cannot simply be set aside. The standard of review to be applied in an appeal is a factor for consideration on a leave application. [ 35 ] This case involved consideration by a highly specialized commission of calculations involved with a pension plan that was registered pursuant to its home legislation. Despite the argument that the question is one of contractual

interpretation and, therefore, the standard of review being correctness, in my view, the issue involves more than that. It involves a review of the plan within the context of the legislation and therefore, outside of exceptional circumstances, the matter is reviewable on a standard of reasonableness. See University of Winnipeg v. Manitoba (Superintendent of Pensions) , 2009 MBCA 7 at para. 6 , 74 C.C.P.B. 71; and Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association , 2011 SCC 61 at para. 34 , [2011] 3 S.C.R. 654 .

There is no reasonable prospect of successfully arguing that the commission’s decision did not meet the standard of reasonableness. [ 36 ] Therefore, the motion for leave to appeal is dismissed. J.A. Appendix A

ARTICLE XI – TERMINATION OF SERVICE 1. A Member who, having made Required Contributions under

Section 1(

a) of

Article III, ceases to be an Employee, for reasons other than death or retirement, shall cease contributions to the Plan, and (

a) if he has completed less than six years of Service, he shall receive a lump sum payment in full satisfaction of all his and his Beneficiary’s rights under the Plan. The amount of such lump sum payment shall be equal to the sum of (

i) his Allocated Required Contributions with Credited Interest thereon, (ii) his Required Contributions after January 1, 1974 with Credited Interest thereon, (iii) his Allocated Voluntary Contributions with Credited Interest thereon, (iv) his Additional Voluntary Contributions after January 1, 1974 with Credited Interest thereon. (

b) if he has completed six years or more of Service, he shall become an Inactive Member. Such an Inactive Member shall, subject to

Section 3 of this Article, be entitled to a deferred pension in the normal form commencing at his normal retirement date, whose yearly amount shall be the sum of (

i) the pension which, according to the Plan Factors, can be provided by the Member’s Allocated Required Contributions with

Credited Interest thereon, (ii) the greater of: (

a) the pension which, according to the Plan Factors, can be provided by a percentage, determined from the Table below, of the Member’s Allocated Company Contributions with Credited Interest thereon; and (

b) a percentage determined from the Table below of the difference, if positive, between the pension calculated in accordance with subsection (c)(

i) of

Section 2 of

Article VII and the pension determined under subsection (b)(

i) of this Section, (iii) the pension which, according to the Plan Factors, can be provided by the Member’s Required Contributions after January 1, 1974 with Credited Interest thereon, (iv) the greater of: (

a) the pension which, according to the Plan Factors, can be provided by a percentage, determined from the Table below, of 25% of the Member’s Required Contributions after January 1, 1974 with Credited Interest thereon; and (

b) a percentage, determined from the Table below, of the difference, if positive, between the pension calculated in accordance with subsections (

a) and (

b) of

Section 2 of

Article VII, and the pension determined under subsection (b)(iii) of this Section, TABLE Number of completed years of Service at date of termination of employment Percentage 6 but less than 7 20% 7 but less than 8 40% 8 but less than 9 60% 9 but less than 10 80% 10 or more 100% It is provided, however, that an Inactive Member may elect to begin receiving the deferred pension, to which he is entitled by this paragraph, on the first day of any month in the 10 year period immediately preceding his normal retirement date. The yearly amount of the pension will be equal to that prescribed in subsections (b)(i), (b)(ii), (b)(iii), (b)(iv) … of this

Section but which shall be reduced actuarially in accordance with the Plan Factors. 2. An Inactive Member, not being an Employee, may, at any time prior to the commencement of his pension, and subject to the following

Section of this Article, elect either: (

a) to receive a lump sum payment equal to the sum of: (

i) his Allocated Required Contributions with Credited Interest thereon, (ii) his Required Contributions after January 1, 1974 with Credited Interest thereon,

(iii) his Allocated Voluntary Contributions with Credited Interest thereon, (iv) his Additional Voluntary Contributions after January 1, 1974 with Credited Interest thereon, in full satisfaction of his and his Beneficiary’s rights under the Plan, except insofar as payment has previously been made under the terms of this Article; or (

b) to receive a lump sum payment equal to the sum of the amounts prescribed by subsections (a)(iii) and (a)(iv) of this

Section in full satisfaction of all his and his Beneficiary’s rights under the Plan in respect of Additional Voluntary Contributions, except insofar as payment has previously been made under the terms of this Article. 3. Notwithstanding Sections 1 and 2 of this Article, an Inactive Member who has completed ten years of continuous employment with the Company, or who has been a Member of the Plan for at least ten years, and who on the date he ceases to be an Employee has attained the age of 45 years, shall not be entitled to elect a lump sum payment in accordance with

Section 2(

a) of this Article. Such an Inactive Member may, however, elect a lump sum payment in accordance with

Section 2(

b) of this Article. In lieu of a lump sum payment in respect of his Required Contributions, such an Inactive Member shall receive a deferred pension in the normal form commencing at his normal retirement date, whose amount shall be computed in accordance with subsections (b)(i), (b)(ii), (b)(iii) and (b)(iv) of

Section 1 of this Article. Such deferred pension shall be non-commutable, non-assignable and incapable of surrender, except as follows: (

a) If the amount of such deferred pension is less than $10 per month, the Inactive Member may elect to receive the commuted value of such pension, calculated in accordance with the Plan Factors, as a lump sum payment, thereby forfeiting his right to the deferred pension. (

b) The Inactive Member may elect to receive as a lump sum payment the commuted value of 25% of such deferred pension, calculated in accordance with the Plan Factors. The remaining 75% of such deferred pension must be taken in the form of a non-commutable non- assignable deferred pension as aforesaid. 4. Where a Member terminates his employment and elects, or is entitled by the terms of the Plan to, a lump sum payment, the Member may direct that such lump sum payment be transferred to a registered pension plan of which he becomes a member upon entering new employment, if the plan so permits, or to a retirement savings plan registered under

Section 146 of the Income Tax Act. Appendix B

ARTICLE IV – INTEREST 1. On and after January 1, 1974 for the purposes of

Article VII,

Article XI,

Article XIII and

Article XV, interest shall be credited to contributions from the Anniversary Date next following the date on which such contributions were made to the Plan. Interest shall be compounded annually on the Anniversary Date each year with proportionate interest up to the first day of the month in which the payment is made.

The rate of interest to be applied each year to Required Contributions, Allocated Required Contributions, Additional Voluntary Contributions, Allocated Voluntary Contributions and Allocated Company Contributions shall be equal to the average annual rate of return earned by the Fund based on market values, allowing for interest, dividends, unrealized capital appreciation and depreciation and investment expenses over the four year period ending on the Anniversary Date as of which the calculation is being made, as calculated and recommended by the Actuary.

Proportionate interest in respect of Required Contributions, Allocated Required Contributions, Additional Voluntary Contributions, Allocated Voluntary Contributions and Allocated Company Contributions, from the previous Anniversary Date up to the first day of the month in which the payment is made, shall be at the rate of ½% per month simple.