Court orders pension administrator to pay Nova Scotia widow $20,000 after mistakenly informing her that pension death benefit had lost three quarters of its value
October 13, 2023
The UA Local 56 Pension Benefit Trust (the “Trust”) and the administrative agent for the plan, Benefit Plan Administrators Atlantic Ltd. (“BPA”), must pay a deceased Nova Scotia plumber’s common law spouse (Wilson) $20,000 in general damages to compensate her for the stress and anxiety that she suffered when BPA erroneously told her that the commuted value of the death benefit payable to her had lost three-quarters of its value.
In correspondence with Wilson, BPA identified several different options for her to receive the death benefit, including a lump sum payment of $124,638.47, and an immediate monthly pension of $360.76. Wilson was led to believe by BPA that responding to BPA’s correspondence was not time sensitive. Both Wilson and BPA were unaware that under Nova Scotia’s Pension Benefits Act, if spouses do not elect an option within 90 days, they are deemed to have elected to receive an immediate pension.
Nearly a year later, BPA informed Wilson that too much time had elapsed, and the value of the lump sum death benefit had been reduced to $36,535.07, prompting Wilson to sue BPA and the Trust for the original lump sum amount. During the litigation, the Trust and BPA revised their position, and began paying Wilson the monthly pension originally offered. However, Wilson maintained her action to attempt to recover the lump sum.
The Supreme Court of Nova Scotia found that Wilson had been "made whole" by the monthly pension payments. This finding was based on affidavit evidence provided by Wilson that indicated that prior to the 90-day decision period imposed by the deeming rule elapsing, she would have elected to receive the death benefit in the form of monthly pension payments.
However, the judge did order the Trust and BPA to jointly pay $20,000 in general damages, as Wilson suffered “serious and prolonged stress and anxiety” as a result of the representation regarding the reduction of the death benefit.
Click on more information to read the judge’s full decision:
