Bell Canada Indexation of Pension Plan Class Action
Koskie Minsky LLP and McKenzie Lake Lawyers LLP commenced a class action against Bell Canada and affiliates arising out of the alleged incorrect approach used by the Defendants to calculate the cost of living indexation pursuant to the Bell Canada Pension Plan. It was alleged that Bell Canada adopted the incorrect approach to indexation such that over 35,000 retirees did not receive the correct Cost of Living Adjustment for the 2017 year. The statement of claim, issued on January 16, 2018, was on behalf of all persons entitled to benefits under the Plan, and who were entitled to receive indexed pension payments as of January 1, 2017.
In 2020, the Ontario Court of Appeal granted Judgment to the Class and decided that the correct rate of indexation for 2017 was 2%, instead of 1%. Therefore, the pensioners must receive a retroactive payment from January 1, 2017 to date. In addition, pension amounts in the future are to be adjusted accordingly.
On July 20, 2021, the Court approved an implementation plan proposed by counsel, including a retroactive payment to all class members and future entitlements, as well as the ancillary motions for approval of legal fees and other matters. The details of all the motions and the Court’s conclusions can be found in the Court’s Reasons for Decision.
The approved implementation plan includes a retroactive payment as well as increased pension payments going forward to reflect the increased indexation. The total amount of the retroactive payments to all Class members is estimated by an actuary to be $35.8 million on the Calculation Date of October 1, 2021, before applicable deductions. The retroactive payments will be made directly to all class members in October, 2021.
In addition, all future pension benefit payments to Class Members from the Plan after the Payment Date will reflect an indexation increase of 2% for the 2017 year rather than 1%. The actuaries previously estimated that the present value of the amount necessary to fund the cost of the lost 1% pension increase for the class was approximately $103 million.
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