Minutes of the  General Meeting of

The Canada Life Canadian Pension Plan Members’ Rights Group

April 27, 2005

 

Executive present:  Wib Antler, Ed Barrett, Phil Davy, Alex Harvey,

                                                  Jim Martin, Gary Nummelin

 

 

  1. The meeting was brought to order at 7:05 pm, Wib Antler presiding.

 

  1. Opening Remarks – Wib Antler

 

    1. Welcome to members and introduction of executive.
    2. Minutes of last October’s general meeting are available from the website, via the AGM Minutes link.
    3. Don MacIntyre has resigned from the executive for personal reasons.  We thank Don for his hard work and significant contribution to the group over the past several years.
    4. We are pleased to announce that Brian Lynch has accepted an appointment to the Executive Committee.   He was formerly Vice President of Investor Relations and Corporate Communications at Canada Life.  We look forward to receiving the benefit of his expertise as our action progresses.  
    5. In June 2004, at our request, the Financial Services Commission of Ontario wrote to the company about the changes made to the Trust Deed which permitted the removal of approximately $40 million in expenses from the plan, and about their refusal to help set up an advisory committee as permitted under the Pension Benefits Act.  FSCO received a response from the outside law firm representing Canada Life at the end of January, 2005.  After reviewing  the report for 1 month, FSCO sent it to us for comment.  We received it on March 4, 2005.

 

Due to other developments about to be discussed, we have referred the expense issue to our lawyers, and have decided not to pursue the issue of the advisory committee at this time.  We have so advised FSCO.

 

  1. Legal Issues – Jim Martin

 

    1. After the last general meeting, we formed a legal search committee to select a law firm to represent us.  By March of this year, we had a short list of 4 firms with significant expertise in pension litigation.  Of these 4 firms, Koskie-Minsky stood out as a firm highly experienced in representing plan members as opposed to plan sponsors.

 

    1. On March 1, 2005, we learned that law firm Harrison Pensa of London, Ont had filed a Statement of Claim against Canada Life on behalf of Mr. JP Marentette, a former employee of CL in London, and member of the partial wind-up group.  The plaintiff was seeking to have this claim certified as a class action suit on behalf of all members of the partial wind-up group, and was suing for a share of the actuarial surplus in the plan.  We attempted to contact Mr Marentette to advise him of the existence of our group, with a view to joining forces, but were unable to reach him.

 

    1. At this point, we determined that we needed legal advice without delay.  We were not familiar with the firm of Harrison Pensa, and felt strongly that we wanted to be represented by a firm that was expert in pension litigation.  We therefore contacted Mr. Mark Zigler of the law firm Koskie-Minsky, who consented to act for us.  Mr. Zigler contacted Harrison Pensa and was hopeful that a mutually satisfactory arrangement could be reached.  However, on April 8, Harrison Pensa filed a certification motion on behalf of Mr. Marentette, and it appears that carriage of the suit will need to be determined by the court.   Some of the factors which influence who is awarded carriage when two or more parties are competing for certification, are the size of the groups involved, their familiarity  with the issues, and the expertise of the law firms representing them.   We will be following this matter closely.

 

    1. David Kidd and Alex Harvey, as members of the partial wind-up group,  have stepped forward and agreed to be the named plaintiffs in our action and we are extremely grateful to them.  Koskie-Minsky have agreed to take the case on a contingency fee basis.  This means that we are not required to put money up front, and they only receive their fees if they win the case.   It also means that they believe our case has merit.  We cannot reveal the specifics of the retainer agreement, but we can say that their fees will be based on their regular hourly rates, and must be approved by the court.

 

    1. Our statement of claim will be drafted within 2 weeks, and will be posted on the KM web site some time after that.  Some of the points will be similar to those put forward by Harrison Pensa, but there will be additional points as well.

 

    1. Because of the urgency created by the Harrison Pensa action, we were unable to seek ratification by the members of the selection and hiring of a law firm until this meeting.. 

 

It was moved and seconded that the selection and hiring of Koskie Minsky as our legal counsel, and the subsequent filing of the Kidd-Harvey class action suit be approved.  Voting was conducted by a show of hands of those voting members present at the meeting.  The motion carried unanimously.

 

  1. Treasurer’s Report – Gary Nummelin

 

Total Income to date     - $27,894.98

Total Expenses - $     515.36

Net Balance                 - $27,379.62

 

  1. Membership Report – Phil Davy

 

    1. The Members’ Rights Group now has a total membership of 850, with 211 voting members.

 

    1. There is a continuing need to recruit new members for our group, either voting or non-voting.  In January 2003,  the Pension Plan was comprised of  3,662 employees, 772 deferred pensioners, and 851 pensioners, for a total of 5,285.  Although the composition is different today, there are clearly many potential members we have not reached yet.

It is still important to recruit voting members and to build up a fund for future expenses.  We may have to seek outside accounting or actuarial help and these expenses may not be paid as part of the legal expense settlement.  We would ask that any members who are financially able, sign up as voting members.

 

    1. Every time we send out a group e-mail, there are 12 or 15 messages returned because of an invalid address.  Usually it is for people who had only provided us with a Canada Life address, and subsequently left the company.  While we have alternative contact information for our voting members, that is not always the case for non-voting members.  If your e-mail address changes, or if you no will no longer have e-mail, please let us know how we can keep in touch with you.

 

  1. Questions and Answers – Ed Barrett

 

    1. How much is all this going to cost?

 

Because the legal action is being costed on a contingency basis, the fee will be higher than it would be if it were pay-as-you-go.  However, K-M will only receive their fees if they win.  There is a legislated cap of 20% of the settlement, although we do not expect the fees to reach this maximum.   Part of the Notice of Claim asks for legal fees to be taken out of any settlement awarded, and the amount of these fees must be approved by the court.

 

    1. Why is it necessary to proceed through the courts when the Financial Services Commission is charged with overseeing the operation of pension plans and ensuring that these plans are managed according to the Pensions Benefit Act?

 

FSCO is primarily concerned with compliance with the Act, while our group’s claim to the surplus and fund expenses have more to do with trust law.  FSCO has been very helpful in providing us with information and in corresponding with the company when asked.  However, because of the Harrison Pensa court action, we have been compelled to proceed via the legal system rather than through the Commission.

 

    1. Will this case fall under federal or provincial jurisdiction?

 

Because the pension fund is registered in Ontario, provincial pension law will prevail.

 

    1. How long do you think this will take – 10 years? 20 years?

 

Our best estimate at this time is perhaps 5 years, but a lot will obviously depend on Great-West Life.   They have not yet declared the end-date for the partial wind-up, so it may be the end of 2005 before we even begin to see serious action.

 

    1. What effect does the Monsanto ruling have on us?  What has happened to the surplus in the London Life plan?

 

The Monsanto ruling means that the surplus which is attributable to the partial wind-up group must be disbursed at the time of the wind-up.  However, it does not address the crucial question of who actually owns our surplus funds.  Essentially, this is what our action seeks to determine.  As far as we know, the London Life surplus issue has not been resolved.   Originally,  many London Life employees were terminated when Great-West Life took over, but no partial wind-up was announced.  Employees successfully went before FSCO claiming that the large number of terminations effectively constituted a partial wind-up, and won enhanced pensions for many, according to the grow-in benefits required by the Pension Benefits Act.  However, because this occurred before the Monsanto ruling, the surplus issue was not addressed.

 

    1. I have found that large corporations and government do not move unless prodded.  Have you considered publicizing our case in the media?

 

Yes.  We do not feel that the time is right yet, but we are willing to seek publicity if that’s appropriate..  Brian Lynch, who has just joined our executive group has experience and will be leading our efforts in this area.

 

    1. Do you think a lot more people would join the group if they did not have to pay the $125?

 

The $125 fee is for voting membership only.  There is no fee to join as a non-voting member.  Anyone who is a member of the Pension Plan may sign up to receive our newsletter, access our website, and attend meetings.

 

    1. Can the company change our benefits?

 

If you are referring to the pension benefit that is to be paid to you, it is a defined benefit and is guaranteed.  However health benefits are not trusteed and are not guaranteed.   The supplementary plan for high earners is also not part of our group’s mandate.

 

    1. Can you provide us with a list of people in the group, to help us in recruiting new members?

 

We have been telling new members that we will not divulge their personal information.  Initially, this was to protect people who were still employed at Canada Life, although with the large number of terminations, this is becoming less of an issue.  However, we will continue to treat our membership list as confidential. 

 

    1. Will membership in this group present any risk of repercussions for people who are still employed at Canada Life / Great-West Life?

 

We have no reason to believe that the company would act in a retaliatory fashion, and feel that it is above this kind of behaviour.

 

    1. If someone has removed his money from the Canada Life Plan to invest elsewhere, will he or she be eligible to share in any distribution of surplus?

 

If you are a member of the partial wind-up group, your right to a share of the surplus is not forfeited if you withdraw your commuted value.  If you are not a member of the partial wind-up group, and if you have withdrawn your commuted value, you do not have any entitlement to a share of the surplus.

 

  1. Closing Remarks – Wib Antler

 

    1. The next general meeting will be in October, 2005.  Exact date, time and location are yet to be determined.
    2. Thanks to all for coming.  Attendance was approximately 195.
    3. The meeting was adjourned at 8:30 pm.

 

Previous Minutes Oct 2004