Bell Canada Pension Plan 1998 COLA Error Class Action
On August 19, 2022, Koskie Minsky LLP commenced a putative class action (the “Claim“) to compel Bell Canada, the Administrator of the Bell Canada Pension Plan, to correct an underpayment calculation error Bell Canada made to the required cost-of-living-allowance (“COLA”) increase in 1998 when it applied a 1% annual increase instead of a 2% increase (the “1998 COLA Error“).
The Claim alleges that as a result of the 1998 COLA Error, retirees who received pension payments in 1998 were underpaid their pension benefits. The error and losses to retirees perpetuate each year subsequent to 1998 because post-1998 COLA increases are being added to incorrect past amounts.
It is our information that there are approximately 23,000 pensioners who have been underpaid as a result of the 1998 COLA Error, of which 11,000 are living retirees and 12,000 are the estates of deceased retirees. The pension actuary retained by our firm estimates the amount owing to the proposed class of retirees is approximately $80 million, plus interest.
Background of the Proposed Class Action
The Claim in respect of the 1998 COLA Error is based on the same pension administration calculation error that the Ontario Court of Appeal held Bell Canada made in 2017 (the “2017 COLA Error“) in the case of Austin v. Bell Canada. As a result of that court decision, Bell Canada arranged to make compensation payments to the retirees who had been underpaid due to the 2017 COLA Error. For further information on that case, please see our page on the Bell Canada 2017 Indexation of Pension Plan Class Action.
Following the release of Austin v. Bell Canada, Bell Canada retirees, including the Bell Pensioners’ Group (“BPG“; an association of Bell Canada retirees and employees who advocate in respect of pension and benefits), contacted Bell Canada on numerous occasions, directly and through our firm, requesting that Bell Canada correct the 1998 COLA Error. Bell Canada refused.
Certain Bell Canada retirees also contacted the federal pension regulator, the Office of the Superintendent of Financial Institutions (“OSFI“) and requested that they direct Bell Canada to correct the 1998 COLA Error. In March 2022, BPG also asked OSFI to be kept informed of any developments about Bell Canada correcting the 1998 COLA Error. The retirees did not receive a meaningful response from OSFI for the next year and a half.
The Proposed Class Action
Given the refusals from Bell Canada and the lack of substantive response from OSFI, our firm commenced the Claim against Bell Canada on behalf of all pensioners, surviving spouses and estates who have been underpaid due to the 1998 COLA Error.
A Notice of Action for the putative class action was issued on August 19, 2022. A Statement of Claim was subsequently filed on September 19, 2022. Copies of these documents can be viewed here.
On July 10, 2023, Madam Justice Akbarali was assigned to case manage this class proceeding.
On August 17, 2023, we filed a motion record in support of our motion for certification. A motion for certification is required to certify this action as a class proceeding. A copy of our motion record can be accessed here.
For further information or if you have questions, please contact us at 1-833-786-0016, or by email at bellcanadacolaclassaction@kmlaw.ca.
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Latest Developments
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June 21, 2024
Bell Canada Pension Plan 1998 COLA Error Class Action Discontinued
On September 19, 2023, the pensioners of the Bell Canada Pension Plan initiated this class proceeding to seek compensation from Bell Canada in respect of an underpayment of pension benefits resulting from a miscalculation of the cost-of-living allowance (“COLA”) increase applied to annual pensions in 1998. The plaintiffs alleged that Bell only applied a 1% COLA increase in 1998, instead of 2%. Certain retirees and the Bell Pensioners Group also complained to the federal pension regulator, the Office of the Superintendent of Financial Institutions (“OSFI”).
Several months after the class action was filed, Bell Canada agreed to pay compensation to all retirees impacted by the 1998 COLA Error in an arrangement it made with OSFI. Bell has recalculated and paid the amounts owing to the pensioners impacted by the 1998 COLA Error.
As of April 2024, of the 23,176 pensioners who were eligible for this payment, Bell has paid approximately $84.2M to 10,563 pensioners and surviving spouses, and to the beneficiaries of 2,906 estates of deceased eligible pensioners. Bell Canada has advised that it will continue to make payments to the estates of impacted deceased pensioners as they continue to come forward indefinitely.
Please contact Bell Canada at 1-888-893-4446 if you have a claim in respect of the 1998 COLA Error. If you have any other questions, please contact the Bell Pensioners Group at 905-695-9230.
Given that the purpose of the class action has been achieved, our firm filed a motion to the court to discontinue the class action. On June 20, 2024, the Ontario Superior Court of Justice granted the motion and approved the discontinuance. The Order of the Court, dated June 20, 2024, is attached here.
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September 25, 2023
On September 25, 2023, we and the Bell Canada lawyers attended a case management conference with the class action judge for this proposed class action. At the conference, the judge scheduled the motion to certify the action as a class proceeding for March 26, 2024.
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July 24, 2023
On July 24, 2023, Bell Canada advised us that it had developed an “action plan” to reimburse the retirees who have been underpaid by the 1998 COLA Error. Bell Canada said that the federal pension regulator, the Office of the Superintendent of Financial Institutions (“OSFI”) “does not object” to its action plan.
Neither the retirees nor our firm were involved nor invited to participate in the formulation of the action plan. Nevertheless, upon receipt of the outline of the plan from Bell Canada, we reviewed it with the actuary we retained and then sent the Bell Canada lawyers a list of questions asking them to clarify the proposed compensation amount, the actuarial methodology, the interest to apply, and the enforceability of the compensation payments, and other aspects of how the action plan would work.
We sent our questions to Bell Canada on August 1, 2023 and again, on August 29, 2023. The Bell Canada lawyers provided a reply to our questions on September 22, 2023. Our pension actuary is currently reviewing Bell Canada’s reply.
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June 21, 2024
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Documents
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Contacts
Toll-Free Hotline: 1-833-786-0016
