Pension Entitlement: Negligent Misrepresentation

Posted by Johannes Schenk on March 12th, 2006 — Posted in Employment Law, Labour Law

Does a pension plan administrator have a duty to advise plan members that it is contemplating making benefit improvements to the plan?

An employee retires and takes a pension, only to find out after retirement, that the benefit package would be that much better at a later retirement time. As an employer and plan administrator have you made a misrepresentation and are you liable?

The Ontario Court of Appeal examines this issue in Hembruff v. Ontario Municipal Employees Retirement Board, [2005] O.J. No. 4667. Here the plaintiffs cashed out their pensions and lost out on an upcoming plan enhancement. The Court of Appeal indicated that there was no misrepresenation in this case.

The case is a useful read for anyone dealing with retiring employees and advising those employees on their retirement package and benefits that they will receive upon leaving the workplace.

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