Ontario Superior Court judge approves Citibank Canada request to correct error in plan text
February 20, 2024
Citibank Canada brought an Application for rectification after discovering a drafting error in its 2002 pension plan restatement (the “2002 Restatement”).
The drafting error relates to pension plan members who elect to receive their pension benefits prior to their normal retirement dates. In such cases, the calculation of those benefits is adjusted because they receive their benefits early. Prior to the 2002 Restatement, the text of the pension plan had always provided the same adjustments for two similarly situated groups of members: (i) Early Retirement Pensioners; and (ii) Deferred Members. However, the effect of the drafting error in the 2002 Restatement resulted in Early Retirement Pensioners and Deferred Members being treated differently under the terms of the pension plan text.
The error went unnoticed (and was never administered) for the next two decades. In support of its Application for rectification, Citibank presented evidence that it never intended to implement such a change and there is no logical reason to do so. Neither the Financial Services Regulatory Authority nor any affected pension plan members objected to the Application for rectification.
The Ontario Superior Court ultimately granted Citibank Canada’s Application for rectification. In reaching this decision, the judge noted: “[s]imply put, this is a classic but unfortunate example of the very circumstance for which the doctrine of rectification exists: an unintentional and inadvertent error that never reflected the intention of the authors of the documents now sought to be rectified.”
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