Telecommunication Employees Association of Manitoba Inc. - International Federation of Professional and Technical Engineers Local 161, et al. v. Manitoba Telecom Services Inc., et al.

(Manitoba) (Civil) (By Leave)


Pensions - Legislation, Interpretation.


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Pensions Legislation Interpretation Whether the Court of Appeal erred in reviewing this case on a correctness standard Whether the Court of Appeal erred in determining that the initial surplus was the same as an actuarial surplus in an ongoing defined pension plan Whether the Court of Appeal erred in overturning the trial judge’s conclusion that the benefits of the two plans were not equivalent in value on the implementation date Whether the Court of Appeal erred in concluding that the undertaking was unenforceable and that the respondents had not breached the MOA Whether an apprehension of bias exists where a recently retired appellate court judge argues a case before a panel of the same court.

When the Manitoba Telephone System ceased to exist as a Crown Corporation, those employees and retirees who had been members of the statutory pension plan became members of the new pension plan created for the new publicly traded entity (“MTS”). The pension assets attributable to those members under the old plan were transferred to the new plan, as were the corresponding liabilities. The difference in the value of the assets and one half of the liabilities (to be assumed by MTS) was determined at trial to be $43,343,000 (the “Initial Surplus”). Representatives of the members demanded that the Initial Surplus be recognized and used solely for their benefit, since it had arisen solely from the contributions of the members, plus interest. Representatives of MTS undertook not to use the Initial Surplus to reduce MTS’s costs or share of contributions to the New Plan. The statute setting up the new plan stipulated that the new plan would “provide for benefits which on the implementation date are equivalent in value to the pension benefits” to which employees had been entitled under the old plan. The appellant employees and pensioners commenced an action for payment of the Initial Surplus from MTS, claiming that MTS had used it contrary to the terms agreed upon. They also sought declarations relating to the governance of the new plan and the invalidity of an actuarial opinion about the equivalency of the benefits under the old and new plans. The Court of Queen’s Bench of Manitoba allowed the action in part, declaring the opinion on equivalency invalid and ordering MTS to pay the appellants $43,343,000 to enhance pension benefits. The Manitoba Court of Appeal allowed the appeal and dismissed a cross appeal.