FST Hearing - Algoma University College

On June 22, 2007, Algoma University College (the “Applicant”), requested a hearing regarding the Notice of Proposal of the Deputy Superintendent, Pensions, dated May 24, 2007, to make an Order under sections 87 and 19 the Pension Benefits Act (the "Act") requiring the Applicant to administer its pension plan, the Algoma University College Pension Plan, Registration Number 1575209 (the "Plan"), in accordance with Article 9 of the Plan.  The Notice of Proposal was issued in response to a request by Mr. John Diluzio.

Mr. Diluzio commenced membership in the Plan in 1993 and on February 23, 2003, commenced a medial leave approved under the Applicant’s long term disability plan under which he continues to receive disability benefits.  Effective December 5, 2005, Mr. Diluzio was terminated from employment with Algoma University College because he had been absent from his position since February 23, 2003.  The applicant takes the position that the contract of employment may be severed based on frustration.  Mr. Diluzio continued to make monthly pension contributions to the Plan until February 2006, at which time the Applicant refused to accept further contributions on the basis that Mr. Diluzio’s employment had been terminated due to frustration of contract. 

Mr. Diluzio contends that the Applicant’s refusal to accept any further contributions from him is contrary to Article 9 of the Plan which provides in part as follows:

Continued Accrual of Benefits While Disabled

(a)        A Member who is on a period of disability due to a physical or mental impairment that prevents the Member from performing the duties of the employment in which he was engaged before the commencement of the impairment as certified by a medical doctor approved by the Employer and who is receiving income from the long-term disability plan of the Employer shall remain a Member of the Plan.  Such a Member shall continue to accrue pension benefits pursuant to section 5.1, provided he agrees to make contributions in accordance with Section 4.2(b) in respect of the period of disability.

(b)        If the disabled Member does not return to active employment with the Employer, he shall cease to be a Member on his Normal Retirement Date and shall be entitled to receive an annual pension commencing on his Normal Retirement Date ….

The Applicant takes the position that membership within the Plan ceases upon termination of employment and that the intent of Article 9 is to extend plan coverage to employees who are unable to work as a result of disability.  The Applicant also submits that coverage only extends to inactive employees who otherwise remain in the employ of the Applicant and states that because Mr. Diluzio ceased employment after December 5, 2005, Article 9 does not apply.

A pre-hearing conference is scheduled for September 12, 2007.