Appeal Court Sets Reasonable Plan Communication Standards

In a decision this week that will bring welcome relief to pension plan administrators, the Ontario Court of Appeal overturned the Ontario Superior Court’s ruling in Hembruff v. Ontario Employees Retirement Board. The Superior Court had decided that pension plan administrators have a duty to inform members of possible changes to plans when such modifications are highly likely or almost certain to be implemented, even if the changes have been neither considered in detail, nor authorized by regulatory authorities. In a unanimous decision, the Court of Appeal determined that OMERS did not make a negligent misrepresentation and did not breach its fiduciary duties to plan members by not informing members of possible plan changes.