Employee Communications – No Duty to Disclose Pension Plan Changes That Are Under Consideration, But Not Finalized

A plan administrator must ensure that all communications, of any nature, made to plan members regarding the pension plan are accurate, up-to-date and clear. However, recent case law makes it clear that there is no duty to warn members of potential plan changes that are under consideration.

The Supreme Court of Canada recently dismissed an application for leave to appeal in the Hembruff v. Ontario Municipal Employees Retirement Board case. This represents a welcome confirmation of the decision made earlier by the Ontario Court of Appeal. In Hembruff, a number of members elected to take early retirement and receive the commuted value of their pensions during the time that their plan’s administrator was considering options for using its surplus. After the members left the plan, the plan was amended and surplus was used to provide benefit enhancements. The members claimed that they had been deprived of the benefit of these enhancements, and essentially made the argument that the