A decision by the Saskatchewan Court of Appeal reminds pension plan administrators to ensure clear communications

In the case of Boreen v. Mosaic Esterhazy Holdings ULC, the Saskatchewan Court of Appeal’s decision demonstrated the importance of clear communications from pension administrators.

Speaking with Benefits Canada in an interview, which was picked up by LegalWriter.net, partner and chair of Torys’ Pensions and Employment practice Mitch Frazer shared his thoughts on the case.

“What it comes down to is that employers and pension plans that want to avoid lawsuits from plan members claiming to be beneficiaries or that want to defend these suits successfully must outline clearly to plan members what their options are,” Mitch said.

“Otherwise, the plan will be liable for any losses incurred.”

In the case, the common law spouse of a deceased plan holder challenged plan administrator Mosaic with a negligent misrepresentation claim when she wasn't awarded her partner’s death benefits upon his passing, despite being named a beneficiary. Due to Saskatchewan law and a false pension statement, the deceased plan holder’s benefits were awarded to his legally married spouse instead.

This decision confirms that a member’s beneficiary designation is not an original representation of who is entitled to the death benefits, rather simply who the member has designated.

Mitch said that the decision puts pension plan administrators on notice to stay aware that members’ marital status may change, either before or after they leave the company.

“So it might be a good idea for administrators to add a Q&A about marital status when they communicate with members. And it might be a good idea to do so more than once a year,” he added.

You can read more about our Pensions and Employment work on our practice page.