Police Association of Nova Scotia Pension Plan v. Amherst (Town)

Police Association of Nova Scotia Pension Plan v. Amherst (Town) Court Court of Appeal Date 2008-08-15 Citation 2008 NSCA 74 Docket CA 291842 Judge/Registrar/Adjudicator MacDonald, J. Michael (Honourable Chief Justice) (CA); Roscoe, Elizabeth A. (Honourable Justice) (CA); Fichaud, Joel E. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Police Association of Nova Scotia Pension Plan v. Amherst (Town) - 2008 NSCA 74 - 2008-08-15 - Library Sheet Decision Content NOVA SCOTIA COURT OF APPEAL Citation: Police Association of Nova Scotia Pension Plan v. Amherst (Town), 2008 NSCA 74 Date: 20080815 Docket: CA 291842 Registry: Halifax Between: Trustees of the Police Association of Nova Scotia Pension Plan Appellants and The Towns of Amherst, Bridgewater, New Glasgow, Springhill, Stellarton, Trenton, Truro and Westville and The Regional Municipality of Cape Breton Respondents and Nova Scotia (Superintendent of Pensions) Respondent and Police Association of Nova Scotia Respondent Judges: MacDonald, C.J.N.S.; Roscoe and Fichaud, JJ.A Appeal Heard: May 28, 2008, in Halifax, Nova Scotia Held: Appeal is allowed and the Superintendent’s order is to be restored per reasons for judgment of Fichaud, J.A.; MacDonald, C.J.N.S. and Roscoe J.A. concurring. Counsel: Peter Driscoll and Hugh Wright, for the appellant Ronald A. Pink, Q.C. and Bettina Quistgaard, for the respondent Towns Agnes E. MacNeil, for the respondent Nova Scotia Superintendent of Pensions David W. Fisher, for the respondent PANS Reasons for judgment: [1] Collective agreements between locals of the Police Association of Nova Scotia and the respondent Towns incorporated the Police Association of Nova Scotia Pension Plan. The Plan provides a defined benefit, but the pension fund has insufficient assets to pay its beneficiaries’ earned benefits. The Superintendent of Pensions, under Nova Scotia’s Pension Benefits Act, ordered the Towns to contribute the amounts needed to eliminate the funding deficiency. The Nova Scotia Supreme Court overturned the Superintendent’s order and the Plan’s trustees appeal. The issue is whether the Supreme Court judge erred by overturning the Superintendent’s order. 1. The Pension Plan, Collective Agreements and Solvency Deficiency [2] The Police Association of Nova Scotia (“PANS”) is a union that represents municipal police officers and related civilian employees in Nova Scotia. PANS has locals certified by the Nova Scotia Labour Relations Board to bargain with the municipal employers of the locals’ members. On December 18, 1981, effective October 1, 1981, PANS established a Pension Plan (“Plan”). The Plan was registered on December 29, 1981 with the Superintendent of Pensions (“Superintendent”) under the earlier version of the Pension Benefits Act, now cited as R.S.N.S. 1989, ch. 340 (“PBA”). [3] Also on December 18, 1981, PANS’ directors and the initial pension trustees executed a trust agreement to govern the administration of the Plan’s fund in accordance with the terms of the Plan. The appellants are the current trustees of the Plan (“Trustees”). [4] The Plan, from its start, provided a defined pension benefit of 2% salary per year of contributed service. This benefit is subject to a maximum and to variations set out in the Plan and its amendments since 1981. The Plan and its amendments also provide some ancillary benefits. The precise formulae are not pertinent to the issues on this appeal. [5] The Plan, as originally written in 1981, said the following about the employer’s obligations to contribute and entitlement to appoint administrative representatives: 1.11 “Employer” means the Police Association of Nova Scotia or a body so designated by the Association or any Local Authority. . . . 1.14 “Local Authority” means an employer whose employees or a class of employees are members of the Police Association of Nova Scotia and who has entered into an agreement with the Police Association of Nova Scotia to participate in the pension plan. 1.19 “Participation Date” means the Effective Date in respect of employees and Special Members of the Police Association of Nova Scotia; however, in respect of each Local Authority it means the date on which the Local Authority has entered into an agreement with the Police Association of Nova Scotia. 3. Eligibility and Membership 3.1 Each Employee who commenced employment with the Employer prior to the Effective Date or Participation Date, whichever is applicable, will be eligible to become a Member of the Plan on the latter of the Effective Date or Participation Date, whichever is applicable, or on the first date upon which he has completed one year of Continuous Service. 3.2 Each Employee who commences employment with the Employer on or after the Effective Date or Participation Date, whichever is applicable, will be eligible to become a Member of the Plan on the first day of the month coincident with or next following the date upon which he has completed one year of Continuous Service. 4. Contributions 4.1 A Member’s “Required Contributions” shall be 5% of his earnings. . . . 4.5 The Employer shall contribute to the fund an amount equal to the Member’s Required Contributions. 4.6 The Employer shall also contribute an amount as required to pay the cost of providing benefits as determined on an actuarial basis over and above that amount referred to in Section 4.5. . . . 12. Administration 12.1 The Pension Plan and Retirement Committee, consisting of: . . . (f) One person appointed by each participating local Authority (sub-ject to a maximum of three), is hereby constituted. . . . 12.4 The Committee shall, (a) Administer the Plan on behalf of the Association in accordance with the provisions contained herein (b) Decide all questions arising with respect to the interpretation and administration of the Plan (c) Make recommendations to the Association from time to time with regard to the appointment and reappointment of the Trustees (d) Establish and guide, in conformity with provisions of the Pension Benefits Act, S.N.S. 1975, Chapter 14, as amended, and the Regulations thereunder, the investment policy to be followed by the Trustees in administering the Fund (e) Receive copies of all actuarial reports, financial statements and lists of investments pertaining to the Plan, and (f) Direct the reporting policy to be followed by the Administrator with respect to the number, form and content of reports and explanations to be given to Members of the Plan from time to time. . . . 12.6 The Committee may from time to time make recommendations to the Association with respect to amendments to the Plan and the Association shall not amend the Plan without prior consultation with the Committee. [6] The Plan was restated once to January 1, 1988 and again as of January 1, 1997. After the 1997 restatement, the relevant provisions said: 1.1 “Act” means the Pension Benefits Act, R.S.N.S. 1989, c. 340, as amended from time to time, the regulations issued thereunder, and the administrative rules adopted by the Nova Scotia Department of Finance, Pension Benefits Division, and, where applicable, shall include similar legislation of a Member’s province of employment. 1.20 “Employee” means any person in the full-time or part-time employment of PANS or of a Participating Employer and who is a member of PANS. 1.21 “Employer” means PANS or any Participating Employer. 1.25 “Member” means an Employee who has joined the Plan and has neither ceased to make contributions required under the Plan, if any, nor retired from the Plan, and includes where the context requires, a former Employee who continues to be entitled to benefits under the Plan. For greater certainty, “Member” includes an Employee who is Disabled and who, after joining the Plan, becomes entitled to receive benefits from a long term disability plan sponsored by the Employer. 1.32 “Participating Employer” means an employer whose employees (or class of employees) are members of PANS and who has entered into an agreement with PANS to participate in the Plan. 3.1 Member Required Contributions Each member shall be required to contribute to the Pension Fund each year by payroll deduction an amount equal to 5% of the Member’s Earnings for that Plan Year, except that no contributions shall be made which would exceed the lesser of: (a) 9% of the Member’s compensation (as defined in the Tax Act) from the Employer for the Plan Year, and (b) $1,000 plus 70% of the Member’s total pension credits (as defined in the Tax Act) for the Plan Year, or such other limit as prescribed by the Tax Act. 3.4 Employer Contributions The Employer shall contribute monthly such amounts, if any, as the Employer determines at its sole discretion, provided that: (a) such contributions shall not be less than the amount, if any, indicated by the Actuary as necessary to maintain registration of the Plan under the Act; and (b) such contributions shall not be more than the amount, if any, indicated by the Actuary as the maximum amount permissible in order to maintain registration of the Plan under the Tax Act. (c) such contributions shall not be less than those made by the Members; and (d) such contributions shall be “eligible contributions” in accordance with the Tax Act. 3.6 Remittance of Member Contributions The Employer shall remit to the Board of Plan Trustees, for deposit to the Pension Fund, all sums deducted from a Member’s pay, within 30 days following the end of the month in which sums are received or deducted. . . . 10.4 Board of Plan Trustees The Board of Plan Trustees shall consist of: . . . (b) one person, but not more than 3, appointed by each Participating Employer; . . . 10.5 Delegation to Board of Plan Trustees The Administrator has delegated to the Board of Plan Trustees responsibility for the following: (a) administering the Plan on behalf of the Administrator in accordance with the provisions contained herein; (b) deciding all questions arising with respect to the interpretation and administration of the Plan; (c) appointing agents and third party advisors to the Plan and monitoring the performance of those agents and advisors, including any Custodian, investment manager, Actuary, third-party administrator or other professionals hired to assist with the administration of the Plan; (d) establishing, in conformity with the provisions of the Act, the investment policy to be followed in administering the Pension Fund; (e) receiving copies of all actuarial reports, financial statements and lists of investments pertaining to the Plan; (f) directing the reporting policy to be followed with respect to the number, form and content of reports and explanations to be given to Members from time to time; (g) recommending amendments to the Plan to the Administrator and reviewing amendments to the Plan proposed by the Administrator; and (h) such other duties as are delegated to the Board of Plan Trustees by the Administrator. [7] The Plan’s definition of “Participating Employer” was amended on March 12, 2003 (registered with the Superintendent on April 29, 2003) stating: 1.32 “Participating Employer” means an employer having employees who are members of PANS and who has entered into an agreement with PANS to permit such employees to participate in the Plan. [8] The municipal respondents are the Towns of Amherst, Bridgewater, New Glasgow, Springhill, Stellarton, Trenton, Truro and Westville and the Regional Municipality of Cape Breton, the latter on behalf of the former Town of Sydney Mines (“Towns”). Each Town employs or has employed police officers belonging to PANS Locals. Each Town entered into a collective agreement with that PANS Local. The dates of those initial collective agreements were: Amherst - January 1, 1987 - PANS Local 104 Bridgewater - November 1, 1997 - PANS Local 108 New Glasgow - January 1, 1982 - PANS Local 103 Springhill - September 3,1986 - PANS Local 203 Stellarton - January 1, 1985 - PANS Local 205 Trenton - April 1, 2001 - PANS Local 302 Truro - January 1, 1989 - PANS Local 102 Westville - April 1, 1995 - PANS Local 206 Sydney Mines - January 1, 1991 - PANS Local 224 [9] In March 1995, Westville and New Glasgow signed an agreement to share police services as of April 1, 1995. On November 30, 1995, Westville, New Glasgow and PANS Locals 103 and 206 agreed to amalgamate the two Towns’ police services. Westville and New Glasgow signed a single collective agreement with PANS Local 103 for November 1, 2000 to October 31, 2004. [10] Upon amalgamation of the Town of Sydney Mines into the Cape Breton Regional Municipality (“CBRM”), PANS Local 307 was certified to represent CBRM Police Officers on December 6, 1996. I will refer to CBRM instead of Sydney Mines. Since December 23, 2004 CBRM police officers have been represented by the Nova Scotia Government Employees Union, not by PANS. As I will discuss, the effective date of the pension valuation and calculated funding deficiency in this case is September 30, 2003, before the change of unions. [11] The Towns’ collective agreements with the PANS Locals either required or entitled the Towns’ employees to join the PANS Pension Plan, and required the Towns both to remit employees’ contributions and pay their own employer contributions for those employees to the administrator of the PANS Plan. [12] The collective agreement of February 29, 2000 between the Town of Amherst and the Amherst Police Association (PANS Local 104) says: Article 27 Pension Plan 27.01 The Town agrees to contribute five percent (5%) of each employee’s yearly earnings to the Police Association of Nova Scotia Pension Plan. This percentage shall be increased to six percent (6%) of salary effective April 1, 2000 and to seven percent (7%) of salary effective April 1, 2001. 27.02 Each employee will contribute five percent (5%) of their yearly earnings to the Police Association of Nova Scotia Pension Plan. This percentage shall be increased to six percent (6%) of salary effective April 1, 2000 and to seven percent (7%) of salary effective April 1, 2001. 27.03 Monthly contributions are to be deducted from both parties and sent to the office of the Administrator of the Police Association of Nova Scotia Pension Plan. 27.04 The Town agrees it is a condition of employment that all employees become members of the Police Association of Nova Scotia Pension Plan. [13] The latest collective agreements in evidence between the applicable PANS Local and the Towns of New Glasgow/Westville (Nov. 1, 2000, Article 25), Stellarton (March 31, 2001, Article 14), and Truro (Apr. 1, 2002, Article 19) are materially similar to the Amherst Article 27 except that the percentages of salary representing contributions vary among the Towns. Springhill’s collective agreement (November 13, 2002 Article 24) is materially the same except that employees may opt out of the Plan and apply the contributions to an RRSP. Trenton’s collective agreement of April 1, 2001, Article 25, is materially the same as Amherst’s provision except that Trenton’s agreement omits the express requirement that the Town remit the employee’s contribution to the Plan’s administrator. [14] Sydney Mines’ collective agreement with PANS Local 224 in the early 1990s was materially similar to Amherst’s Article 27, quoted above. After Sydney Mines amalgamated into CBRM, the CBRM collective agreement of November 1, 1997 with PANS Local 307 said: 31.03 Employees of the former Town of Sydney Mines shall have the option of staying in the PANS pension plan (the contributions shall be 5% Employee and 5% Employer), or of transferring to the Employer’s money purchase plan, as per Article 31.04. CBRM’s collective agreement with PANS Local 307, dated January 1, 2000 through December 31, 2004, Article 31.05, provided that all employees should belong to the CBRM defined benefit plan or to the CBRM money purchase plan. [15] In 1993 and 1994, when Bridgewater was considering whether to adopt the PANS Plan, the Town expressly considered the risk that the Town would be responsible for a funding deficiency. An internal town memo of October 25, 1993 says: Town of Bridgewater M E M O R A N D U M RE: Comparison P.A.N.S. Pension Plan versus Town of Bridgewater London Life Plan ========================================================== It is noted that the two plans differ significantly in that the P.A.N.S. plan is a defined benefit plan versus that of the Town of Bridgewater which is a money purchase (defined contribution) plan. The major differences in the cost and benefits of the plan are as follows: 1. The P.A.N.S. plan is a 5% employee/employer (total 10%) contribution plan with the employer responsible for any shortfall that may occur in the plan to cover its defined benefits. The Town of Bridgewater’s is a 4.5% employee/employer contribution (total 9.0%). The difference is that, as a minimum, 11.1% additional contributions will be made to the P.A.N.S. plan versus that of the present Town of Bridgewater plan. ... 4. The P.A.N.S. plan “pools” all contributions and any shortfall in any other police department’s pension funds will be covered firstly by surpluses from other police departments, and secondly by additional contributions by all employers. Later, Bridgewater signed a collective agreement with PANS Local 108, dated November 1, 1997, saying: 44.01 All employees shall have the option to join the PANS Pension Plan. PANS will provide a letter to the Commission [the Board of Police Commissioners of the Town of Bridgewater] relieving the Commission of any further financial responsibility other than five percent (5%) to the Plan. PANS provided Bridgewater with a “Letter of Understanding” dated May 20, 1998, signed by the “Administrator, PANS Pension Plan” stating: It is agreed should members of the Bridgewater Police Association, Local 108 of PANS wish to join the PANS Pension Plan, The Board of Police Commissioners of the town of Bridgewater will not be liable for any unfunded liability in the PANS Pension Plan. The Commission’s contribution of 5% of earnings for each employee will be all they will have to contribute unless something different is agreed upon between the parties. PANS provided a similar letter dated February 8, 2001. A letter of March 17, 2003 from Bridgewater’s Director of Finance to Great West-London Life says: We wish to partially transfer the plan as Section 44.01 of our current Collective Agreement with PANS gives the employees the option to join the PANS Pension Plan and they have requested this change. The effective date of the partial transfer is October 31, 2002. [16] The actuarial firm Morneau Sobeco valued the Plan as of September 30, 2003 (“Morneau Report”), disclosing a solvency deficiency. The report said: The solvency liability exceeds the solvency assets by $2,098,457. This amount is called the solvency deficiency. The solvency deficiency must be amortized by special payments over a period not exceeding 5 years. Details of the required payments are provided in Section 3. [17] The Towns declined to make the solvency payments prescribed by the Morneau Report. The Plan’s administrator referred the matter to the Superintendent under s. 45 of the PBA. 2. The PBA and its Regulations [18] The PBA and its Regulations govern the powers of the Superintendent, whose decision is the subject of this appeal. Here I will just quote the PBA and its Regulations. Later I will discuss the application of these provisions to this case. [19] The relevant provisions of the PBA are: - 2 In this Act, . . . (p) "employer", in relation to a pension plan, a member of a pension plan or a former member of a pension plan, means the employer required to make contributions under the pension plan; . . . (w) "multi‑employer pension plan" means a pension plan established and maintained for employees of two or more employers who contribute or on whose behalf contributions are made to a pension fund by reason of agreement, statute or municipal by‑law to provide a pension benefit that is determined by service with one or more of the employers, but does not include a pension plan where all the employers are affiliates of each other; . . . (z) "participating employer", in relation to a multi‑employer pension plan, means an employer required to make contributions to a multi‑employer pension plan; . . . (ae) "pension plan" means a plan organized and administered to provide pensions for members and under which the employer of the member is required to make contributions, and includes a multi‑employer pension plan . . . - 4 (1) This Act applies to every pension plan that is provided for persons employed in the Province. - 5 This Act and the regulations shall not be construed to prevent the registration or administration of a pension plan and related pension fund that provide pension benefits or ancillary benefits more advantageous to members than those required by this Act and the regulations. - 10 The Superintendent shall . . . (c) perform such functions and discharge such duties as are assigned from time to time by the Governor in Council or the Minister. R.S., c. 340, s. 10. - 12 No person shall administer a pension plan, except during the first ninety days after the establishment of the plan, unless a certificate of registration or an acknowledgement of application for registration of the pension plan has been issued by the Superintendent. R.S., c. 340, s. 12. - Where refusal or revocation 13 Where registration of a pension plan has been refused or revoked by the Superintendent, no person shall administer the plan except for the purpose of wind up. R.S., c. 340, s. 13. - 15 (1) The administrator of a pension plan shall apply to the Superintendent, within the prescribed period, for registration of the pension plan. - 16 (1) The documents that create and support a pension plan shall set out (c) the benefits and rights that are to accrue upon termination of employment, termination of membership, retirement or death; . . . (da) the requirements for entitlement under the pension plan to any pension benefit or ancillary benefit; (e) the contributions or the method of calculating the contributions required; (f) the method of determining benefits payable; . . . (j) the mechanism for establishing and maintaining the pension fund; - Application for registration of amendment 18 (1) The administrator of a pension plan shall apply to the Superintendent, with sixty days after the date on which the pension plan is amended, for registration of the amendment. - Effective date of amendment 19 (1) An amendment to a pension plan is not effective until an application for registration of the amendment is made in accordance with this Act and the regulations. - Amendment void 20 (1) An amendment to a pension plan is void if the amendment reduces (a) the amount or the commuted value of a pension benefit accrued under the pension plan with respect to employment before the effective date of the amendment; (b) the amount or the commuted value of a pension or a deferred pension accrued under the pension plan; or (c) the amount or the commuted value of an ancillary benefit for which a former member has met all eligibility requirements under the pension plan necessary to exercise the right to receive payment of the benefit. (2) Subsection (1) does not apply to a multi‑employer pension plan established pursuant to a collective agreement or a trust agreement. (3) Subsection (1) does not apply to a pension plan that provides defined benefits if the obligation of the employer to contribute to the pension fund is limited to a fixed amount set out in a collective agreement. R.S., c. 340, s. 20; 2002, c. 21, s. 8. - Refusal and revocation 24 (1) The Superintendent may (a) refuse to register a pension plan that does not comply with this Act and the regulations; (b) revoke the registration of a pension plan that does not comply with this Act and the regulations; (c) revoke the registration of a pension plan that is not being administered in accordance with this Act and the regulations; (d) refuse to register an amendment to a pension plan if the amendment is void or if the pension plan with the amendment would cease to comply with this Act and the regulations; (e) revoke the registration of an amendment that does not comply with this Act and the regulations. (2) The authority of the Superintendent pursuant to subsection (1) is subject to the right to a reconsideration pursuant to Section 89. (3) A refusal of registration of a pension plan or a revocation of registration of a pension plan operates to terminate the pension plan as of the date specified by the Superintendent. (4) A refusal of registration of an amendment to a pension plan or the revocation of an amendment to a pension plan operates to terminate the amendment as of the date specified by the Superintendent. (5) Where registration of a pension plan is refused or revoked, the administrator shall wind up the pension plan in accordance with this Act and the regulations. R.S., c. 340, s. 24; 2002, c. 21, s. 10. - Notice of overdue contribution 45 (1) The administrator of a pension plan or, if there is an agent of the administrator responsible for receiving contributions under the pension plan, the administrator and the agent shall give written notice to the Superintendent of a contribution that is not paid when due. (2) The administrator and the agent shall give the notice to the Superintendent within sixty days after the date on which the administrator or the agent first became aware of the failure to pay the contribution. R.S., c. 340, s. 45. - Funding requirements 62 (1) A pension plan is not eligible for registration unless it provides for funding sufficient to provide the pension benefits, ancillary benefits and other benefits under the pension plan in accordance with this Act and the regulations. (2) An employer required to make contributions under a pension plan, or a person required to make contributions under a pension plan on behalf of an employer, shall make the contributions to (a) the pension fund; or (b) where pension benefits under the pension plan are paid by an insurance company, the insurance company that is the administrator, in the prescribed manner and in accordance with the prescribed requirements for funding. R.S., c. 340, s. 62. - Order of Superintendent 87 (1) The Superintendent, in the circumstances mentioned in subsection (2) and subject to Section 89 (reconsideration), by a written order may require an administrator or any person to take or to refrain from taking any action in respect of a pension plan or a pension fund. (2) The Superintendent may make an order pursuant to this Section if the Superintendent is of the opinion, upon reasonable and probable grounds, that (a) the pension plan or pension fund is not being administered in accordance with this Act, the regulations or the pension plan; (b) the pension plan does not comply with this Act and the regulations; or (c) the administrator of the pension plan, the employer or the other person is contravening a requirement of this Act or the regulations. (3) In an order pursuant to this Section, the Superintendent may specify the time when or the period of time within which the person to whom the order is directed shall comply with the order. (4) An order pursuant to this Section is not effective unless the reasons for the order are set out in the order. R.S., c. 340, s. 87. - 89 (2) Where the Superintendent proposes to make an order pursuant to ... (e) Section 87 (administration of pension plan or contravention of Act or regulation), the Superintendent shall serve notice of the proposal, together with written reasons therefor, on the administrator and on any person to whom the Superintendent proposes to direct the order. - 89 (6) A notice pursuant to subsection (1), (2), (3), (4) or (5) shall state that the person on whom the notice is served is entitled to a hearing by the Superintendent if the person delivers to the Superintendent, within thirty days after service of the notice pursuant to that subsection, notice in writing requiring a reconsideration, and the person may so require such a reconsideration. - 89 (7) Where the person on whom the notice is served does not require a reconsideration in accordance with subsection (6), the Superintendent may carry out the proposal stated in the notice. - 89 (8) Where the person requires a reconsideration by the Superintendent in accordance with subsection (6), the Superintendent shall reconsider the proposed action and notify the person of the decision. - 89 (9) Upon receipt by a person of the decision of the Superintendent pursuant to subsection (8), that person may appeal to the Trial Division of the Supreme Court and the Court may confirm the decision or substitute any decision the Superintendent was authorized to make. R.S., c. 340, s. 89. - Conflict with other Acts 104 In the event of a conflict between this Act and any other Act, this Act prevails unless the other Act states that it is to prevail over this Act. R.S., c. 340, s. 104. - Regulations 105 (1) The Governor in Council may make regulations (a) prescribing any matter referred to in this Act as prescribed; . . . (p) prescribing requirements that shall be complied with in the administration of a pension plan; . . . (x) generally for carrying into effect the provisions of this Act. [20] These provisions of the PBA remain as they existed on September 30, 2003, the valuation date in the Morneau Report. [21] Regulations 2 (j), (o) and (v), 5-6 and 8 of the Pension Benefits Regulations, NS Reg 164/2002, under the PBA, state: Definitions 2 In these regulations, . . . (j) “going concern unfunded actuarial liability” means the excess of going concern liabilities over going concern assets; . . . (o) “normal cost” means the cost of pension benefits and ancillary benefits with respect to a fiscal year of a pension plan determined in accordance with the going concern valuation methods and assumptions used; . . . (v) “solvency deficiency” means a deficiency determined by a solvency valuation performed in accordance with Section 16; Payments - general 5 (1) A pension plan must include a provision for funding of pension benefits and any other benefits provided under the plan that sets out the obligation of the employer, or any person required to make contributions on behalf of the employer, to contribute both in respect of the normal cost of the benefits and any going concern unfunded actuarial liabilities and solvency deficiencies under the plan. (2) An employer, or any person required to make contributions on behalf of the employer, must make payments to the pension fund or to the insurance company, as applicable, of amounts that are not less than the sum of (a) any sums received from employees, including money withheld from employees, whether by payroll deduction or otherwise, as the employees' contributions to the pension plan; (b) the balance of the normal cost; and (c) special payments determined in accordance with Section 6. (3) The payments referred to in subsection (2) must be made within the following time limits: (a) all sums received by the employer from an employee or deducted from an employee's pay as the employee's contribution to the pension plan, within 30 days following the month in which the sum was received or deducted; (b) employer contributions in respect of the normal cost, in monthly instalments not later than 30 days following the month for which contributions are payable, the amount of each instalment to be either a fixed dollar amount, a fixed dollar amount per employee or member of the plan or a fixed percentage of either covered payroll or employee contributions, in accordance with such contributions as are certified under clause 12(1)(a) or 13(2)(a); and (c) all other special payments determined in accordance with Section 6, by equal monthly instalments throughout the fiscal year of the plan, within 30 days following the end of each month. (4) If the period covered by a report filed under Section 4, 12 or 13 has passed and no new report has been filed with the Superintendent under Section 4 or 13, the employer must continue to make payments in accordance with the requirements of the most recent report filed until a new report is filed. (5) This Section does not apply to a multi-employer pension plan established pursuant to a collective agreement or trust agreement, nor to a pension plan that provides defined benefits under which the obligation of an employer to contribute to the pension fund is limited to a fixed amount set out in a collective agreement. Special payments - general 6 (1) Subject to subsections (2) and (3) and Section 9, the special payments to amortize a going concern unfunded actuarial liability or solvency deficiency must not be less than the sum of (a) any remaining special payments determined in accordance with subsection (5) with respect to an “initial unfunded liability” or “experience deficiency” as defined in regulations made by Order in Council 76-1421 dated December 7, 1976, and in existence on December 31, 1987; (b) the amount required to liquidate by equal instalments, with interest at the going concern valuation rate, any other going concern unfunded actuarial liability within a period of 15 years from the date on which the liability arose; (c) the amount required to liquidate that portion of any solvency deficiency at January 1, 1988, created by the application of Section 79 of the Act, by equal instalments, with interest at the solvency valuation interest rate, within 15 years after the solvency valuation at January 1, 1988; and (d) the amount required to liquidate the whole or part of any solvency deficiency, other than one identified in clause (c), by equal instalments, with interest at the solvency valuation interest rate, as follows: . . . (iii) . . . within 5 years after the review date of the solvency valuation in which the solvency deficiency is identified [see ¶ 22 below]. (2) If a new series of monthly instalments is commenced under clause (1)(d), the schedule of special payments referred to in clauses (1)(a), (b) and (c) with respect to any portion of an amortization period which extends beyond the 5-year period established for the new series of payments under clause (1)(d) must be reduced or eliminated so that the total present value of all special payments, based on the interest assumption used in the going concern valuation, will be equal to the going concern unfunded actuarial liability. (3) As an alternative to the calculation of minimum special payments under clauses (1) (b), (c) and (d), the payments may be determined by reference to a schedule of payments determined in accordance with subsection (4) (a) as of the date the going concern unfunded actuarial liability arose, for payments referred to in clause (1)(b); or (b) as of the date of the solvency valuation, for payments referred to in clauses (1)(c) and (d). (4) The schedule of payments referred to in subsection (3) must be determined as follows: (a) each scheduled payment is a constant percentage of the projected future payroll of members at the date of establishment of the schedule; (b) the present value of the scheduled payments at the date of establishment of the schedule is equal to the amount of the liability being liquidated; (c) the projected future payroll is determined using the same actuarial assumptions as used in the going concern valuation where the going concern actuarial unfunded liability was determined; (d) the amortization periods for each series of scheduled payments are the same as the respective periods under clauses (1)(b), (c) and (d); and (e) the present value of scheduled payments is determined (i) for payments referred to in clause (1)(b), using the interest rate assumed in the going concern valuation, and (ii) for payments referred to in clauses (1)(c) and (d), using the interest rate assumed in the solvency valuation. (5) The minimum remaining special payments referred to in clause (1)(a) must be determined after using any unused actuarial gains in existence on December 31, 1987. Payments ‑ multi‑employer plans and defined benefit or defined contribution plans 8 (1) A multi‑employer pension plan established pursuant to a collective agreement or trust agreement, or a pension plan that provides defined benefits under which the obligation of an employer to contribute to the pension plan is limited to a fixed amount set out in a collective agreement must include a provision for the funding of pension benefits and any other benefits provided under the plan that sets out the obligation of an employer, or any person required to make contributions on behalf of the employer, to contribute in respect of the plan. (2) For a pension plan referred to in subsection (1), an employer, or any person required to make contributions on behalf of an employer, must make payments to the pension fund or the insurance company, as applicable, of amounts that are not less than (a) any sums received from an employee, including money withheld from an employee, whether by payroll deduction or otherwise, as the employee's contribution to the pension plan; and (b) amounts that are required by the applicable collective agreement to be paid by the employer or the person required to make contributions on behalf of the employer. (3) The payments referred to in subsection (2) must be made within the following time limits: (a) all sums received by the employer from an employee or deducted from an employee's pay as the employee's contribution to the pension plan, within 30 days following the month in which the sums were received or deducted; and (b) all other amounts, within the time limit specified by the applicable collective agreement, but in any event within 30 days following the month in which the period of employment giving rise to the payments occurred. (4) For a pension plan referred to in subsection (1), an actuary must, as part of a report required pursuant to Section 4, 12 or 13, perform such tests as are necessary to determine the sufficiency of the contributions required by the collective agreement or trust agreement to provide for the benefits set out in the plan, without consideration of any provision for reduction of benefits set out in the plan. (5) If, as a result of tests performed under subsection (4), an actuary determines that the required contributions are not sufficient to provide for the benefits under the plan, the actuary must propose options available to the administrator of the plan that if taken will result in the sufficiency of the required contributions to provide for the benefits under the plan. (6) If an actuary proposes options in accordance with subsection (5), (a) the actuary must file a copy of the proposal with the Superintendent within 30 days of submitting the proposal to the administrator and within the time period referred to in subsection 13(5); (b) within 180 days following the date on which the actuary submitted the proposal to the administrator, the administrator must take such action as will result in the required contributions being sufficient to provide for benefits under the plan; (c) within 180 days following the date on which the actuary submitted the report to the administrator, the administrator must advise the Superintendent of the action taken in order for the required contributions to be sufficient to provide for benefits under the plan and must file all documents relevant to the action taken. [22] The Pension Benefits Regulations in NS Reg. 164/2002 replaced the earlier Pension Benefits Regulations under the PBA, NS Reg. 269/87 dated December 17, 1987, Royal Gazette, Part II, Vol. 11, No. 25, p. 1889, as amended. The current Regulations 5 and 8, quoted above, are materially the same as the former Regulations 4 and 6, as amended by NS Reg. 132/93. The current Regulation 6 is materially the same as Regulation 5 of NS Reg. 269/87, amended by NS Regs. 233/92 and 132/93. No issue has been raised by any party about the application of the earlier Regulations instead of the 2002 Regulations. Regulation 6(1)(b)(iii) of NS Reg. 164/2002 was replaced by NS Reg. 328/2007, s. 1. I have quoted the 2002 version of Regulation 6 that was in force on the valuation date in the Morneau Report (September 30, 2003) and at the dates of the Superintendent’s decisions under appeal. 3. The Superintendent’s Decision [23] After the matter was referred under s. 45, the Superintendent, Ms. Nancy MacNeill Smith, received submissions from the Towns objecting to the solvency payments prescribed in the Morneau Report. On November 7, 2005, under ss. 87, 89(2)(e) and 89(6) of the PBA, the Superintendent served the parties with a proposed order that the Towns should make the solvency payments necessary to fund the Plan’s obligations. On November 15, 2005, the Towns filed a Notice of Reconsideration to the Superintendent under ss. 89 (6) and (8). The Superintendent held a reconsideration hearing on February 27 and 28, and March 1, 2006. On May 12, 2006, the Superintendent ordered that the Towns make the prescribed solvency payments further to ss. 87 and 89(8). [24] Eight witnesses, one from each Town, testified at the reconsideration hearing before the Superintendent on February 27-28 and March 1, 2006. The appeal record has no transcript of this testimony. [25] The Superintendent gave written reasons that are central to the application of the standard of review. So I will repeat the Superintendent’s reasons at length. [26] Her reasons in the proposed ruling of November 7, 2005, included: The relevant sections of the Act and the Plan are set out in Schedule “A” attached to my decision. In his letter of May 26, 2005, Mr. Pink states that none of his clients have agreed to be an employer under the terms of the Plan. He further states that if a Town has not agreed to be an employer, then the provisions of the Act cannot apply. He states there is no evidence or indication that any of the Towns agreed to be an employer under the Plan and to be bound by the terms of the Plan. Mr. Pink further states there is no evidence of anything in writing in which the Towns have agreed to participate in the Plan. I agree that all parties are better served when agreements are in writing. Indeed, it is quite customary for employers to enter into participation agreements which set out the rights and obligations of each of the parties. Nevertheless, while I agree that it would have been prudent for the Towns to have a written agreement regarding their payments into the Plan on behalf of their employees, the Act does not require written agreements for participating employers. Furthermore, an agreement can be proven by evidence other than a written document. In this case, the Towns have been contributing to the Plan since its establishment on October 1, 1981. As at September 30, 2003, the market value of the Plan fund totalled $10,830,217. Over the last 24 year period, the Towns have made substantial contributions to the Plan amounting to millions of dollars. Although they are not a party to a participation agreement, the Towns’ contributions over the preceding 24 years suggests that they have in fact agreed to contribute to the Plan. In addition, the Towns are party to various collective agreements pursuant to which the Towns have agreed in writing to make contributions to the Plan. The collective agreements are further evidence that the Towns have agreed to make contributions to the Plan. Subsection 2(p) of the Act, provides that an employer means “the employer require to make contributions under the pension plan.” Based on the Towns’ conduct over the last 24 years and the provisions of the collective agreements, it is my opinion that the Towns have agreed and are therefore required to contribute to the Plan. As a result, the Towns are employers for the purposes of the Act. . . . Subsection 10.4 of the Plan text does provide for a maximum of 3 persons to be appointed by each Town as trustees under the Trust Agreement. It is my understanding however that none of the Towns have chosen to exercise this right. Regardless, the terms of the Trust agreement and whether the Towns have exercised their rights to appoint trustees has no bearing on the determination of whether they are an employer under the Act. As a final argument, Mr. Pink states the Towns contributions should be limited by the contributions specified in the collective agreements. He states the collective agreement does not bind the employer as a participant under the plan. Mr. Pink goes on to state that the only way a contribution obligation can be forced by PANS is through the collective agreement. As discussed above, it is my opinion that the collective agreement is evidence that the Towns agreed to make contributions to the Plan. The Towns’ prior conduct is also evidence that the Towns have agreed to contribute to the Plan. As a result, the Towns’ are an employer under the Act and required to make the payments in accordance with the Act and the Plan text. If the terms of a collective agreement do not comply with the Act, the Act applies. Section 5 of the Regulations provides that a pension plan must include a provision for funding of pension benefits that sets out the obligation of the employer to contribute both in respect of the normal cost of the benefits and any going concern unfunded actuarial liabilities and solvency deficiencies under the plan. Section 3.4 of the Plan text provides that the employer shall contribute monthly such amounts, if any, as the Employer determines at its sole discretion, provided that such contributors shall not be less than the amount, if any, indicated by the Actuary as necessary to maintain registration of the Plan under the Act. Section 62 of the Act states that a pension plan is not eligible for registration unless it provides for funding sufficient to fund the pension benefits to which members are entitled under the plan. Such contributions must be remitted monthly, as per section 3.7 of the Plan text and subsection 5(3) of the Regulations. Therefore, in order for the Plan to maintain registration under the Act the Towns must make the payments identified in the 2003 actuarial valuation report in respect of benefits currently accruing for the active members and in respect of the unfunded liabilities and solvency deficiencies. [27] Her reasons for the May 12, 2006 confirmation order included: On November 7, 2005, I proposed to make an order under subsection 87(2)(c) of the Act, for payment by the Towns of the unfunded liability payments and solvency payments identified in the September 30, 2003 actuarial valuation report. By letter dated November 15, 2005, the Towns requested a reconsideration hearing of my proposed order. The reconsideration hearing was held on February 27th, February 28th and March 1st, 2006. In the hearing, the Towns identified three major issues: (a) they were not an employer; (b) if they were an employer they were not bound by Regulation 5; and (c) they can’t be a participating employer without a resolution of council. ... Employer The Towns state they are not employers with respect to the PANS Plan, and as such are not bound by the Act. The Towns also argue that because they are not a signatory to the PANS Plan, they are not bound by the terms of the plan. All of the Towns employ police officers who are members of PANS and, as a condition of their employment, require those officers to participate in the PANS Plan (except for Bridgewater officers for whom membership is optional, and Sydney Mines officers who are now required to join the Cape Breton Regional Municipality plan). Employee is defined in Section 1.22 of the PANS Plan as any person in the employment of PANS or of a Town and who is a member of PANS. The Towns deduct contributions from the officers’ pay, and remit those contributions, together with contributions made by the Towns, to the PANS Plan administrator. Sections 1.23 and 1.32 of the PANS Plan text define as employers a) PANS and b) employers having employees who are members of PANS and who have entered into an agreement with PANS to permit such employees to participate in the Plan. The definition of employer in Section 2(p) of the Act is the employer required to make contributions under the pension plan. The definition of pension plan found in Subsection 2(ae) of the Act defines a pension plan as organized and administered to provide pensions for members and under which the employer of the members is required to make contributions. Under Section 3, 4 of the PANS Plan, the Towns are required to make contributions to fund the promised benefits. There is no requirement under the Act that the employers be a signatory to the plan documents. The Towns are employers for the purposes of the Act because they are employers making contributions to the PANS Plan. ... Collective Agreements The Towns are party to various collective agreements with PANS. The agreements require the Towns’ employees who are members of PANS to participate in the PANS Plan. The Towns state their only obligations are to make the contributions that are specified in the collective agreements. However, the use of collective agreements to establish contributions as contemplated under the plan is not restrictive as to the Towns’ contributions. As per section 3.4(c) of the PANS Plan text, the employer contributions shall not be less than the members’ contributions unless otherwise specified in the collective agreement. (Italics added). The collective agreements are not meant to restrict the Towns’ contributions, but rather to establish what percentage of pay the contributions are, if they are to be less than member contributions. The collective agreements cannot be used to limit contributions under the PANS Plan. If such was the intent, the plan would include this as a provision, and the collective agreements would state there is no further obligation on the employer to fund the pension benefits and address what happens if the funding is insufficient to provide for the promised benefits. The collective agreements cannot be used to contract out of the legislated requirements of the Act to fund the benefits. If the terms of a collective agreement do not comply with the Act, the Act applies, not the agreement. Administration During the Hearing, the Towns stated they did not know anything about the PANS Plan, the benefits it provided, or how it operated, and since they were not involved in the administration of the Plan, they were not acting as employers. There is no requirement in Section 14 of the Act that the administrator must be an employer. In this plan, PANS, one of the employers, is the administrator. Under Section 10.5 of the PANS Plan, PANS has delegated certain administrative duties to the Board of Plan Trustees. The degree to which the Towns chose to participate in the operation of the PANS Plan and their knowledge of the plan does not change their status as employers under the terms of the plan. The Towns had rights under Sections 35 and 36 of the Act to access information if they chose to do so. The PANS Plan meets the requirements of Section 14 of the Act with respect to who can be the administrator of the plan. Participation Agreements The Towns state they never agreed orally or in writing to participate in the PANS Plan, and that they were never obligated to have a signed participation agreement. There is no requirement under the Act that participation agreements be signed, except for multi-employer plans (defined in Section 2(w) of the Act). As per Section 66 of the Act, in a multi-employer plan it is the employer’s responsibility to provide the administrator with a copy of the agreement that requires the employer to make contributions. It is not the duty of the administrator to provide participation agreements under multi-employer plans. With respect to the Towns’ oral or written agreement to participate, the collective agreements agreed to by the Towns and the locals of PANS require participation in the PANS Plan. The collective agreements are evidence the Towns agreed in writing to participate in the PANS Plan. . . . I agree that all parties are better served when all agreements are in writing. Indeed, it is quite customary for employers to enter into participation agreements which set out the rights and obligations of each of the parties. Nevertheless, while I agree that it would have been prudent for the Towns to have a written agreement regarding their payments into the PANS Plan on behalf of their employees, the Act does not require written agreements for participating employers. Trustees . . . The Towns have identified a conflict between the Trust Agreement and the PANS Plan text as to who can appoint trustees. Although subsection 10.4 of the PANS Plan text does provide for a maximum of 3 persons to be appointed by each Town to the Board of Plan Trustees, there are currently no Town representatives on the Board. Section 7 of the Trust Agreement states PANS appoints the trustees. This discrepancy between the terms of the PANS Plan and the trust Agreement regarding the appointment of trustees is an issue to be resolved by the parties. The requirements of Section 29(4A) of the Act and Regulation 55(c)(ii) have been met with respect to the trustees of the fund. Requirement to fund The Towns state their contributions should be limited to the contributions specified in the collective agreements. Section 62 of the Act states that a pension plan is not eligible for registration unless it provides for funding sufficient to fund the pension benefits to which members are entitled under the plan. Regulation 5 provides that a pension plan must include a provision for funding of pension benefits that sets out the obligation of the employer to contribute both in respect of the normal cost of the benefits and any going concern unfunded actuarial liabilities and solvency deficiencies under the plan. Such contributions must be remitted monthly, as per subsection (3). Under subsection (5), these requirements do not apply to multi-employer plans established under a collective agreement or trust agreement, or to a pension plan under which the employer’s obligation to contribute is limited to a fixed amount set out in a collective agreement. The Towns state that if they are subject to the Act, they are not subject to Regulation 5, but instead are subject to Regulation 8. Regulation 8 applies to multi-employer plans or plans where the obligation of an employer to contribute to the plan is limited to a fixed amount set out in a collective agreement. Such plans must include a provision for funding the plan benefits and the provision must set out precisely what is the obligation of the employer to make contributions to the plan. For such plans, Regulation 8(2)(b) states employer contributions to be remitted to the plan may not be less than the amounts required by the collective agreements to be paid by the employer. The Towns claim the PANS Plan is a pension plan under which the obligation of an employer to contribute to the pension plan is limited to a fixed amount set out in a collective agreement. However, the PANS Plan does not restrict the Towns’ contributions to those stated under the collective agreements. Section 3.4 of the PANS Plan requires the Towns to provide the funding necessary to fund the promised benefits. The Towns have not recognized that Regulation 8 requires the plans to include a provision for the funding of pension benefits and any other benefits provided under the plan that sets out the obligation of the employer to contribute in respect of the plan. Section 3.4 of the PANS Plan provides that the employer shall contribute monthly such amounts, if any, as the Employer determines at its sole discretion, provided that such contributions shall not be less than a) the amount, if any, indicated by the Actuary as necessary to maintain registration of the Plan under the Act; b) not more than permitted under the Income Tax Act (Canada); and c) not less than the contributions made by the members, unless otherwise established through a collective agreement process. The PANS Plan quite clearly states in section 3.4 the requirement of the Towns to contribute the amounts necessary to fund the benefits. It does not limit the Towns’ contributions to those specified in the collective agreements. Required Contributions For the above reasons, I conclude the Towns must make the payments identified in the 2003 actuarial valuation report in respect of benefits currently accruing for the active members and in respect of the unfunded liabilities and solvency deficiencies. The breakdown of contributions required by the Towns is as follows: Current Service Share of Special Payments Town/Association Normal Cost Going Concern Solvency Amherst $69,170 $35,800 $129,660 Bridgewater 58,070 0 0 New Glasgow 66,860 35,920 128,010 PANS 0 2,710 9,270 Springhill 36,780 8,660 31,000 Stellarton 26,390 11,150 40,240 Sydney Mines 0 5,300 19,290 Trenton 18,780 0 0 Truro 107,310 31,410 111,610 Westville 12,760 4,150 14,720 Town’s Total $396,120 $135,100 $483,800 Employee’s [sic] are required to contribute $433,500 for current service. The liabilities identified for each of the Towns are in respect of their own employees, and relate to the cost of providing a pension to their own employees in retirement. [28] I have omitted several passages of the Superintendent’s reasons that, in my view, are unnecessary to decide this appeal. 4. Appeal to the Nova Scotia Supreme Court [29] The Towns appealed the Superintendent’s ruling to the Nova Scotia Supreme Court under s. 89(9) of the PBA. At the appeal hearing in the Nova Scotia Supreme Court, the parties filed the following agreed statement of facts: Agreed Statement of Facts 1. The Appellants are collectively referred to as the “Towns”. 2. At the reconsideration hearing before the Nova Scotia Superintendent of Pensions held on February 27 and 28, and March 1, 2006, the only witnesses to testify were the following: · Gregory Herrett, Chief Administrative Officer of the Town of Amherst; · Jim Langille, Chief Administrative Officer for the Town of Truro; · Bob Funke, Interim Chief Administrative Office of the Town of New Glasgow; · Joyce Eaton, Town Clerk and Treasurer of the Town of Stellarton; · Debbie Kampen, Chief Administrative Officer of the Town of Trenton; · Donald Tabor, Town Clerk and Treasurer of the Town of Springhill; · Gordon MacDougall, Human Resources Officer for Cape Breton Regional Municipality (“CBRM”); and · Ken Smith, Town Manager of the Town of Bridgewater. 3. The parties hereto agree that the only witnesses called testified at the reconsideration hearing before the Superintendent of Pensions as set out in paragraphs 4-11 below. 4. The only written agreements entered into by the Towns relating to the PANS Pension Plan are the Collective Agreements with PANS. There was no evidence of any other oral or written agreements or contracts by the Towns relating to the PANS Pension Plan. 5. None of the Towns has ever had a representative on the Committee or the successor Board of Plan Trustees established under the PANS Pension Plan to administer the Plan, nor have the Towns ever been given notice of any meetings of the Committee or the Board of Plan Trustees, or attended any meetings of the Committee or the Board of Plan Trustees. 6. None of the Towns has ever had a representative appointed as a Trustee under the Trust Agreement, nor have the Towns ever been given notice of any meetings of the Trustees or attended any meetings of the Trustees, except that the Towns were invited to attend a meeting of the trustees of the PANS Pension Plan held on April 20, 2005 that was held to discuss the funding issues in dispute in this case, and Mr. Herrett testified that representatives of some, if not all, of the Towns did attend this meeting. 7. In April and May of 2004, at least some of the Towns sent virtually identical letters to the Administrator of the PANS Pension Plan with respect to the appointment by each Town of Trustees to the Board of Plan Trustees. The letters were sent at the direction of the Towns’ legal advisor with respect to the present dispute and as a result of the present dispute. 8. The Towns have never played any role in the administration or operation of the PANS Pension Plan. 9. There was no evidence that the Towns have ever been given notice of or agreed to any amendments to the PANS Pension Plan or the Trust Agreement. The Towns did agree to change the contributions of the Towns and the police officers to the PANS Pension Plan by agreeing in collective bargaining to changes to the Collective Agreements. 10. PANS established the PANS Pension Plan to provide pension benefits for its members. Each of the Towns sponsors and administers its own pension plan for its employees, or provides a pension plan for its employees under the plan registered by the Union of Nova Scotia Municipalities. The Police Officers employed by the Towns became members of the PANS Pension Plan, and left the pension plans provided by each Town to its employees at the request of PANS, except that membership in the PANS Plan is optional for the Police Officers of the Town of Bridgewater, and Sydney Mines officers could choose to join the CBRM pension plan effective November 1, 1997, and there was no evidence of any prior Town pension plan in existence for the Town of Westville. 11. During the oral testimony of Ms. Joyce Eaton, Town Clerk and Treasurer of Stellarton, counsel for the Towns sought to introduce into evidence a letter, which is attached to as Exhibit “A” to this Agreed Statement of Facts. Mr. David Fisher, counsel for PANS, objected to the letter being admitted on the ground that it was “without prejudice”. Counsel for the Towns argued that the letter was only “without prejudice” to another matter concerning an individual Plan member. The Superintendent of Pensions upheld the objection and refused to accept the letter into evidence. [30] Justice LeBlanc heard the appeal on May 28, 2007. On November 27, 2007, the judge issued a decision (2007 NSSC 344). He ruled that the standard of review was correctness and concluded: CONCLUSION [88] For the reasons set out above, I am satisfied that the Superintendent erred in concluding that the appellant Towns were obligated to make good the unfunded liabilities, either under the PANS Pension Plan or as a result of the operation of the Pension Benefits Act or the Municipal Government Act. Most of the judge’s decision, preceding this conclusion, recites the evidence and submissions. Although the judge distinguishes some authorities, it is not entirely clear what are the judge’s “reasons set out above”. Insufficiency of reasons is one of the Trustees’ grounds of appeal to the Court of Appeal. [31] On January 15, 2008 the judge issued an order, allowing the Towns’ appeal from the Superintendent’s order. [32] The Trustees have appealed the judge’s decision to this court. 5. Issues [33] The Trustees’ factum states four issues, that I reorder and reword: (1) Did the judge err by utilizing a correctness standard of review? (2) Under the applicable standard of review, did the judge err by setting aside the Superintendent’s decision? (3) Did the judge fail to give sufficient reasons? (4) Did the judge err by finding that PANS took the position that the Towns were not “participating employers” under the Plan? [34] In my view, the appeal may be decided by the first and second issues, and it is unnecessary to discuss the third and fourth. [35] Nobody submitted that the issues were properly for a collective agreement arbitrator under the principles discussed in Regina Police Association Inc. v. Regina (City) Board of Police Commissioners, [2000] 1 S.C.R. 360 and Quebec (Commission des droits de la pesonne et des droits de la jeunesse) v. Quebec (Attorney General), [2004] 2 S.C.R. 185. So I will not address that point. 6. First Issue - What is the Standard of Review of the Superintendent’s Decision? [36] The judge considered the contextual factors under the former pragmatic and functional approach and decided that the Superintendent’s decision should be reviewed for correctness in all respects. [37] The Court of Appeal applies a correctness appellate standard to the judge’s administrative standard of review (SOR) analysis: Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226 at ¶ 43-44 per Chief Justice McLachlin. [38] The Supreme Court issued Dunsmuir v. New Brunswick, 2008 SCC 9 after the judge’s decision here. Justices Bastarache and LeBel, for five justices, stated the following principles governing the administrative SOR. [39] Correctness and reasonableness are now the only standards of review (¶ 34). The court engages in “standard of review analysis”, without the “pragmatic and functional” label (¶ 63). [40] The ultimate question on the selection of an SOR remains whether deference from the court respects the legislative choice to leave the matter in the hands of the administrative decision maker (¶ 49). [41] The first step is to determine whether the existing jurisprudence has satisfactorily determined the degree of deference on the issue. If so, the SOR analysis may be abridged (¶ 62, 54, 57). [42] If the existing jurisprudence is unfruitful, then the court should assess the following factors to select correctness or reasonableness (¶ 55): (a) Does a privative clause give statutory direction indicating deference? (b) Is there a discrete administrative regime for which the decision maker has particular expertise? This involves an analysis of the tribunal’s purpose disclosed by the enabling legislation and the tribunal’s institutional expertise in the field (¶ 64). (c) What is the nature of the question? Issues of fact, discretion or policy, or mixed questions of fact and law, where the legal issue cannot readily be separated, generally attract reasonableness (¶ 53). Constitutional issues, legal issues of central importance, and legal issues outside the tribunal’s specialized expertise attract correctness. Correctness also governs “true questions of jurisdiction or vires”, ie. “where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter”. Legal issues that do not rise to these levels may attract a reasonableness standard if this deference is consistent with both (1) any statutory privative provision and (2) any legislative intent that the tribunal exercise its special expertise to interpret its home statute and govern its administrative regime. Reasonableness may also be warranted if the tribunal has developed an expertise respecting the application of general legal principles within the specific statutory context of the tribunal’s statutory regime (¶ 55-56, 58-60). [43] I will begin with the existing SOR jurisprudence respecting decisions of the Superintendent of Pensions. [44] In Hawker Siddeley Canada Inc. v. Superintendent of Pensions (N.S.) (1994), 129 N.S.R. (2d) 194 (C.A.), the court considered the SOR for an appeal under s. 89(9) of the PBA from a wind up decision by the Superintendent. Chief Justice Clarke (¶ 30, 35) noted that the PBA imposes a broad range of responsibilities on the Superintendent, the administration of the PBA involves public policy and the legislation anticipates that the Superintendent would exercise significant expertise in that administration. Chief Justice Clarke concluded: [39] Section 89(9) gives the court the authority to review the decision of the Superintendent. In doing so, the court may confirm or substitute. The power on appeal is very broad. However, I agree with Justices Nathanson and MacAdam that in the scheme of the Act, the decision of the Superintendent is entitled to deference. [45] In Imperial Oil Ltd. v. Superintendent of Pensions (N.S.) (1995), 142 N.S.R. (2d) 26 (C.A.), the court again considered the SOR in an appeal under s. 89(9) from the Superintendent’s wind up decision. Justice Freeman (¶ 8-12) referred to Chief Justice Clarke’s ruling in Hawker Siddeley and concluded that the Superintendent’s decisions at the core of her jurisdiction attract curial deference. [46] In Spectrum Pension Plan (Administrator) v. Superintendent of Pensions (N.S.) (1997), 161 N.S.R. (2d) 1 (C.A.), the Superintendent determined the entitlement to a pension surplus after a wind up. On a s. 89(9) appeal from the Superintendent’s decision, Justice Hallett applied correctness to legal issues for which the Superintendent had no particular expertise: [151] As can be seen from these quotations, deciding who gets the surplus in a pension plan on its wind‑up is usually determined by a court and involves the application of principles of trust and contract law to the facts. The Superintendent has no significant expertise beyond that possessed by the reviewing Court. Therefore, assuming the Superintendent had jurisdiction, she must be correct in her interpretation of the relevant documents and correct in her application of the law to the facts in order to avoid reversal on appeal. With respect to findings of fact by the Superintendent, only errors in the fact finding process that are palpable and overriding will be interfered with on appeal with respect to decisions made within jurisdiction. [47] In Spectrum, Justice Hallett distinguished Chief Justice Clarke’s ruling in Hawker Siddeley by referring to Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557. Justice Hallett said: [142] The decision of this Court in Hawker Siddeley was filed March 15th, 1994, before the decision of the Supreme Court of Canada in Pezim was filed on June 23rd, 1994. Pezim dealt with a standard of judicial review of a specialized tribunal, the decisions of which are subject to appeal. Pezim is, therefore, the authority on this issue. [48] So, with the aim of reconciling Hawker Siddeley and Spectrum, I will turn to Pezim. The Supreme Court deferred to the Securities Commission despite a right of statutory appeal. Justice Iacobucci’s decision, for the Court, anticipated the factors that later embodied the pragmatic and functional approach, as redesigned by Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 1222, and Dunsmuir’s standard of review analysis. Justice Iacobucci said: B. Principles of Judicial Review 61 ... The central question in ascertaining the standard of review is to determine the legislative intent in conferring jurisdiction on the administrative tribunal. ... 62 ... Courts have also enunciated a principle of deference that applies not just to the facts as found by the tribunal, but also to the legal questions before the tribunal in the light of its role and expertise. ... 63 At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the tribunal's jurisdiction (jurisdictional error) or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the tribunal and where the tribunal has no greater expertise than the court on the issue in question, as for example in the area of human rights. ... 64 The case at bar falls between these two extremes. On one hand, we are dealing with a statutory right of appeal pursuant to s. 149 of the Act. On the other hand, we are dealing with an appeal from a highly specialized tribunal on an issue which arguably goes to the core of its regulatory mandate and expertise. . . . 70 The breadth of the Commission's expertise and specialisation is reflected in the provisions of the Act. Section 4 of the Act identifies the Commission as being responsible for the administration of the Act. The Commission also has broad powers with respect to investigations, audits, hearings and orders. . . . 71 In reading these powerful provisions, it is clear that it was the legislature's intention to give the Commission a very broad discretion to determine what is in the public's interest. To me, this is an additional basis for judicial deference. 72 It must also be noted that the definitions in the Act exist in a factual or regulatory context. They are part of the larger regulatory framework discussed above. They are not to be analyzed in isolation but rather in their regulatory context. This is something that requires expertise and thus falls within the jurisdiction of the Commission. This is yet another basis for curial deference. . . . D. The Questions of Law at Issue 77 As mentioned above, it is also necessary to focus on the specific question of law at issue to determine whether it falls within the tribunal's expertise and whether deference is warranted. The specific sections at issue in this case are ss. 67, 144 and 154.2 of the Act. 78 The decision to make an order and the precise nature of that order, under s. 144, as well as any decision obliging a person to pay the costs of a hearing necessitated by his or her conduct, pursuant to s. 154.2, are clearly within the jurisdiction and expertise of the Commission. The other provision at issue is s. 67 which involves an interpretation of the words "material change" and "as soon as practicable". 79 Both "material change" and "material fact" are defined in s. 1 of the Act. . . . 82 As already mentioned, the present case turns partly on the definition of "material change". ... Thus, not all changes are material changes; the latter are set in the context of making sure that issuers keep investors up to date. Consequently, it would seem wholly uncontroversial that the determination of what information should be disclosed is an issue which goes to the heart of the regulatory expertise and mandate of the Commission, i.e, regulating the securities markets in the public's interest. 83 This case also turns on the meaning of the words "as soon as practicable" in s. 67 of the Act which reveal when a material change should be disclosed to the public. In my view, the timeliness of disclosure also falls within the Commission's regulatory jurisdiction. 84 In summary, having regard to the nature of the securities industry, the Commission's specialization of duties and policy development role as well as the nature of the problem before the court, considerable deference is warranted in the present case notwithstanding the fact that there is a statutory right of appeal and there is no privative clause. [49] Pezim recognized that, despite a statutory right of appeal, legal issues arising under the tribunal’s home statute and at the core of the tribunal’s institutional expertise may attract deference on judicial review. I do not read Spectrum as diluting that principle, which also is consistent with Hawker Siddeley. [50] Hawker Siddeley, Imperial Oil and Spectrum predated the pragmatic and functional approach as formulated by Pushpanathan in 1998. [51] In Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), [2004] 3 S.C.R. 152, the Court applied the pragmatic and functional approach to a decision of a financial services tribunal respecting wind up issues under Ontario’s Pension Benefits Act. Justice Deschamps for the Court reviewed the four contextual factors. She noted (¶ 7) that the legislation provided a statutory right of appeal with no privative clause, indicating “less deference to the tribunal on judicial review”. Respecting the nature of the problem, she said (¶ 8): 8 The issue on appeal is a pure question of law, related to the interpretation of a section that has no specialized technical meaning. Statutory interpretation is an exercise in which the courts are well equipped to engage. The question here concerns the establishment of statutory rights by construing the legislature's intention from the text of s. 70(6), the legislative purpose, and the statutory context in which it is situated. Generally speaking, such legal questions will attract a more searching standard of review as being clearly within the expertise of the judiciary, unless the legal question is "at the core" of the Tribunal's expertise (Voice Construction Ltd. v. Construction & General Workers' Union, Local 92, [2004] 1 S.C.R. 609, 2004 SCC 23, at para. 29; see also Pushpanthan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, at para. 34). On relative expertise, she stated: 12 Overall, there is little to indicate that the legislature intended to create a body with particular expertise over the statutory interpretation of the Act. The Tribunal would not have any greater expertise than the courts in construing s. 70(6). Thus, this factor also suggests a lower amount of deference is required to be given to the Tribunal's decisions on the issue of statutory interpretation. Finally, respecting the purpose of the legislation, Justice Deschamps (¶ 15) said that the discrete issue of statutory interpretation in Monsanto involved no broad, discretionary, technical or policy laden factors that, it may be assumed, the legislature intended to assign to the specialized administrative body. Justice Deschamps applied a correctness standard. [52] In Kerry (Canada) Inc. v. DCA Employees Pension Committee, 2007 ONCA 416, 282 D.L.R. (4th) 227, leave to appeal granted January 31, 2008, by SCC, the Ontario Court of Appeal (¶ 24-34), following Monsanto, held that a correctness SOR would apply to the Financial Services Tribunal’s decisions under Ontario’s Pension Benefits Act that involve pure statutory interpretation. The court ruled, however, that the interpretation and application of pension documents and related questions of mixed fact and law attracted a reasonableness SOR. [53] Since Dunsmuir, the Federal Court of Appeal, in Cousins v. Canada (Attorney General), 2008 FCA 226 at ¶ 17-26 has applied a reasonableness SOR to a decision of the Superintendent of Financial Institutions under the Pension Benefits Standards Act 1985, R.S.C. 1985 c. 32 (2nd Supp.). The Superintendent’s decision involved surplus distribution after a pension plan’s partial termination. Justice Blais, for the court, noted several distinctions with Monsanto, including that in Cousins the issue was more factual and discretionary than the straightforward point of statutory interpretation in Monsanto. [54] In PANS’ case, there is no privative clause and s. 89(9) provides a statutory right of appeal from the Superintendent to the Nova Scotia Supreme Court. This indicates less deference as noted in Spectrum and Monsanto. [55] We do not, however, have a straightforward matter of pure statutory interpretation, as existed in Monsanto. Here, there are topics involving: (a) the application of pension plan provisions; (b) fact-laden determinations whether the Towns acted as employers, or whether PANS’ and the Towns’ implementation of the PANS Plan evidenced PANS’ agreement to the pension provisions of the collective agreements and the Towns’ agreement to the PANS Plan; (c) policy-impacted issues respecting the degree to which the PBA’s minimum standards should protect pensioners by ensuring solvency funding for an insolvent direct benefit pension plan; (d) how the PANS Plan was affected by the more lenient provisions in Regulation 8 for multi-employer pension plans (MEPPs) or collective agreement defined benefits, which involves expertise in the operation of Regulations 5 and 8; and (e) the exercise of the Superintendent’s remedial discretion under the PBA. [56] The Superintendent’s decision whether the Towns contravened their funding obligations under the PBA involves mixed issues of fact and law. The legal points are embedded in the context of those broader topics. To varying degrees, these topics engage the comment by Justices Bastarache and LeBel in Dunsmuir (¶ 49): . . . As Mullan explains, a policy of deference "recognizes the reality that, in many instances, those working day to day in the implementation of frequently complex administrative schemes have or will develop a considerable degree of expertise or field sensitivity to the imperatives and nuances of the legislative regime": D. J. Mullan, "Establishing the Standard of Review: The Struggle for Complexity?" (2004), 17 C.J.A.L.P. 59, at p. 93. [57] The nucleus of those topics is the Superintendent’s statutory responsibility to see that pension plans are funded. That is a core function of the Superintendent’s authority under her home statute. In St. Mary’s Paper Inc. (Re), [1994] O.J. No. 1426, 73 O.A.C. 1 (CA) at ¶ 14, appeal dismissed as moot [1996] 1 S.C.R. 3, Justices Arbour and Osborne said: . . . the employer’s promise to pay pension benefits under the plan is a promise which is subject to the carefully calibrated regulatory scheme set out in the PBA and its Regulations. Justices Arbour and Osborne continued (¶ 32) to say that the employer’s obligation to fund the Plan “is central to the regulatory scheme established by the PBA”. The same effect: Kaplan, Pension Law (2006, Irwin Law Inc.) p. 384. The legislature intended that this core function be exercised with the benefit of specialized institutional expertise in the pension field. For the factual issues, the Superintendent heard eight witnesses whose untranscribed testimony is unavailable to the courts in the appeal record. These topics engage deference as discussed in Hawker Siddeley, Imperial Oil, Pezim, Pushpanathan, Dunsmuir, Nolan and Cousins. [58] In argument, the Towns suggested this case involves just simple issues, needing no regulatory expertise that would trigger deference. I cannot accept this suggestion. As I will discuss (¶ 88-97), had the Towns understood the PBA and its Regulations, the Towns could have arranged their pension commitments to avoid their current predicament. That not one of these nine municipal governments, some over a span of decades, did so, speaks to the complexity of the pension context and norms entwined in this regulatory scheme. [59] In Buschau v. Rogers Communications Inc., [2006] 1 S.C.R. 973, Justice Deschamps for the majority discussed the role of the Superintendent under the federal Pension Benefits Standards Act, 1985: 19 The complex statutory and regulatory framework to which pension plans are subject cannot be overlooked. Recognizing the economic and social importance of pension plans, Parliament and the vast majority of provincial and territorial legislatures have adopted legislation regulating them. The first federal pension benefits standards legislation came into force on March 23, 1967 (S.C. 1966‑67, c. 92). The current statute, the PBSA, was initially enacted in 1986 (S.C. 1986, c. 40). Under it, an important role of control and supervision is assigned to the Superintendent (see A. N. Kaplan, Pension Law (2006), for analysis on the analogous role of the Superintendent under the Ontario legislation). The Superintendent administers the PBSA, collects information and conducts studies concerning pension plans and their operation (s. 5). Strict investment and solvency standards are imposed on plan administrators (s. 9(1) and Pension Benefits Standards Regulations, 1985, SOR/87‑19, rr. 6 to 10), who must also file documents and information required by the PBSA (ss. 7.4 and 12). A plan administrator also acts as a trustee for the employer, the members of the plan, and any persons entitled to pension benefits. The Superintendent can issue a direction of compliance if he is of the view that an administrator or an employer is pursuing a course of conduct that is contrary to sound financial practices, or that a pension plan is not being administered in accordance with the PBSA (s. 11(1) and (2)). If the Superintendent's direction is not complied with, the pension plan's registration may be revoked (s. 11.1). The Superintendent also plays a key role at the termination and distribution stage (ss. 9.2 and 29, and rr. 16 and 24). For example, his consent must be obtained before a surplus can be distributed (r. 16(2)(d)). Guidelines and instruction guides are published by the Superintendent to assist in the administration and termination of plans and trusts. Specific attention is paid to the rights of beneficiaries upon a request for distribution of a surplus. The Guidelines to Administrators for Plan Terminations make it clear that a delay in winding up will not be accepted simply because the administrator prefers to manage the funds. 20 In essence, the Superintendent plays a crucial role in the protection of beneficiaries. Although most of his interventions relate to supervision of the solvency requirements, he also acts as a gatekeeper for the distribution of a pension fund. The Superintendent has unique duties and responsibilities vis‑à‑vis beneficiaries that may make it possible to avoid resorting to a common law rule that was designed for an environment totally different from that of pension law. [60] The Superintendent’s front line role under Nova Scotia’s PBA is similar. I refer to ss. 10, 12, 13, 15(1), 16(1), 24, 62, 87 and 89 of the PBA quoted earlier (¶ 19). Justice Deschamps’ comments in Buschau recall Chief Justice Clarke’s similar characterization of the Superintendent’s role in Hawker Siddeley, ¶ 30, 35. [61] The Towns suggested that their status as “employer” was a jurisdictional issue, reviewable by correctness. In Dunsmuir, Justices Bastarache and LeBel discussed jurisdiction: 59 Administrative bodies must also be correct in their determinations of true questions of jurisdiction or vires. We mention true questions of vires to distance ourselves from the extended definitions adopted before CUPE. It is important here to take a robust view of jurisdiction. We neither wish nor intend to return to the jurisdiction/preliminary question doctrine that plagued the jurisprudence in this area for many years. "Jurisdiction" is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. Before CUPE Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227, the courts treated “preliminary or collateral matters” as jurisdictional. This unruly test generated question-begging applications of “jurisdiction”. At the extreme, any error in the tribunal’s chain of reasoning conceivably could block the tribunal’s jurisdiction to continue with the reasoning process. Dunsmuir reiterates CUPE’s rejection of this ephemeral approach to jurisdiction. Here the Superintendent had authority, or jurisdiction, to make the inquiry under ss. 87 and 89 of the PBA. Her inquiry involved various statutory provisions including the PBA’s definition of “employer”. Whether the Towns were “employers” does not open the jurisdictional shortcut to a correctness SOR. [62] From all these authorities, my conclusions on the SOR are these. Straightforward matters of pure law that do not involve inextricably mixed issues of fact and law, discretion, policy or technical pension expertise, should be reviewed for correctness. Issues of fact, inextricably mixed fact and law, discretion, policy, or complex legal issues under the PBA that engage the Superintendent’s pension expertise are governed by reasonableness. I will apply reasonableness to the five topics mentioned above (¶ 55). In my respectful view, the reviewing judge here erred in law by applying an across the board SOR of correctness to all aspects of the Superintendent’s ruling. 7. Second Issue - Did the judge err by setting aside the Superintendent’s decision? [63] In Dunsmuir, Justices Bastarache and LeBel explained reasonableness. The Court examines the tribunal’s decision, first to identify intelligible reasoning, and second to determine whether the conclusion is within range of acceptable outcomes: 47 Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision‑making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. . . . 49 Deference in the context of the reasonableness standard therefore implies that courts will give due consideration to the determinations of decision makers. As Mullan explains, a policy of deference "recognizes the reality that, in many instances, those working day to day in the implementation of frequently complex administrative schemes have or will develop a considerable degree of expertise or field sensitivity to the imperatives and nuances of the legislative regime": D. J. Mullan, "Establishing the Standard of Review: The Struggle for Complexity?" (2004), 17 C.J.A.L.P. 59, at p. 93. . . [64] They also explained correctness: 50 . . . When applying the correctness standard, a reviewing court will not show deference to the decision maker's reasoning process; it will rather undertake its own analysis of the question. The analysis will bring the court to decide whether it agrees with the determination of the decision maker; if not, the court will substitute its own view and provide the correct answer. From the outset, the court must ask whether the tribunal's decision was correct. [65] The Towns make three submissions: (a) PANS’ failure to sign the collective agreements meant the Towns had no agreement with PANS; (b) PANS’ failure to accommodate Towns in the administration of the Plan meant the Towns were not participating employers; and (c) the Towns should only pay what they agreed to pay, and they only agreed to pay the fixed amount of contribution stated in their collective agreements. I will discuss these in turn. (a) PANS’ failure to sign the collective agreements [66] The Towns’ factum summarizes its submission on this main issue: 188. The Towns submit that the fundamental question that determines liability in this case is whether the Towns have entered into an agreement with PANS to participate in the PANS Pension Plan. . . . 210. The Towns submit that they can only be held liable to fund the deficit in the PANS Pension Plan if they are Employers under the terms of the Plan. . . . 211. The Towns submit that they are not Employers under the Plan, because they have never “entered into an agreement with PANS to participate in the PANS Pension Plan”. [67] The Superintendent’s proposed ruling on November 7, 2005 rejected the Towns’ submission. She found: In this case, the Towns had been contributing to the Plan since its establishment on October 1, 1981. As at September 30, 2003, the market value of the Plan fund totalled $10,830,217. Over the last 24 year period, the Towns have made substantial contributions to the Plan amounting to millions of dollars. Although they are not a party to a participation agreement, the Towns’ contributions over the preceding 24 years suggests that they have in fact agreed to contribute to the Plan. In addition, the Towns are party to various collective agreements pursuant to which the Towns have agreed in writing to make contributions to the Plan. The collective agreements are further evidence that the Towns have agreed to make contributions to the plan. Subsection 2 (p) of the Act, provides that an employer means “the employer required to make contributions under the pension plan”. Based on the Towns’ conduct over the last 24 years and the provisions of the collective agreement, it is my opinion that the Towns have agreed and are therefore required to contribute to the Plan. As a result, the Towns are employers for the purposes of the Act. [68] The Superintendent’s confirmation ruling of May 12, 2006, rejected the Towns’ similar submission for substantially the same reasons (above ¶ 27). Her confirmation ruling also referred to the provisions in the collective agreement that employees would join the PANS Plan and the terms of the PANS Plan governing employer contributions. She concluded that the Towns were within the term “employer required to make contributions under the pension plan” in s. 2(p) of the PBA. [69] Did the Superintendent commit an appealable error? [70] Section 62(2)(a) of the PBA says: 62 (2) An employer required to make contributions under a pension plan . . . shall make the contributions to (a) the pension fund . . . in the prescribed manner and in accordance with the prescribed requirements for funding. [71] Sections 105(1)(a) and (p) authorize the Governor-in-Council to make regulations prescribing “any matter referred to in this Act as prescribed” and “requirements that shall be complied with the administration of a pension plan”. There is no challenge to the validity of the PBA’s regulations. [72] Regulation 5(2) prescribes: 5 (2) An employer . . . must make payments to the pension fund . . . of amounts that are not less than the sum of (a) any sums received from employees, including money withheld from employees, whether by payroll deduction or otherwise, as the employees' contributions to the pension plan; (b) the balance of the normal cost; and (c) special payments determined in accordance with Section 6. Under Regulation 2(o) “normal cost” is the cost of pension benefits earned in the current fiscal year. Regulation 6 prescribes the “special payments” needed “to amortize a going concern unfunded actuarial liability or solvency deficiency”. [73] Under s. 2(p) of the PBA, an “employer” is “the employer required to make contributions under the pension plan”. So the issue is whether each Town is an “employer required to make contributions under a pension plan” under ss. 2(p) and 62(2) of the PBA. If the answer is yes, then ss. 87(1) and (2) of the PBA authorize the Superintendent to order “any person to take . . . any action in respect of a pension plan or a pension fund” or to require that person to comply with his obligations under the PBA. [74] The Superintendent’s decision correctly interpreted the legislation to identify the issue as whether the Towns were employers “required to make contributions under the pension plan” according to the definition of “employer” in s. 2(p). [75] To analyze that issue the Superintendent reviewed (1) the collective agreements’ provisions that cited the PANS Plan, (2) the terms of the PANS Plan governing employer contributions and (3) the Towns’ longstanding practices that implemented the PANS Plan. Clearly the first and second factors are germane. So is the third, as the Towns’ factum acknowledges: 229. As this Court noted in White, supra, [White v. Halifax (Regional Municipality) Pension Committee, [2007] N.S.J. No. 61 (Q.L.) (NSCA)] the conduct of the parties may be considered in determining the reasonable expectation of the parties as to what has been contracted for. The Superintendent correctly interpreted the PBA to choose the factors for analysis. [76] The Towns submit that the Superintendent erred in her interpretation of the collective agreements and Plan provisions and evidence that the parties’ conduct established an agreement between PANS and the Towns. Here we move to the reasonableness SOR. [77] The 1981 Plan required contributions from an “employer”, defined as PANS or a “local authority”. The 1997 Plan required contributions from an “employer”, defined as PANS or a “participating employer”. The “local authority” in the 1981 Plan and the “participating employer” after 1997 were both defined as employers “who had entered into an agreement with PANS” to participate in the Plan. The March 2003 amendment still defined “participating employer” as an employer who “has entered into an agreement with PANS.” Every version requires an agreement between the employer and PANS. [78] The collective agreements were signed by the Towns with the PANS locals. PANS itself was not a signator. The Towns say that a local union and its parent are separate legal entities, and an agreement with the local is not an agreement with the parent. The Towns say that their collective agreements with the locals are not “an agreement with the Police Association of Nova Scotia”, as required by the definitions in the Plan. At the hearing in the Court of Appeal, the Towns’ counsel acknowledged that this submission would falter if PANS had co-signed the collective agreements. [79] I respectfully disagree with the Towns’ submission, and I disagree that the Superintendent committed an appealable error. The separate legal status of PANS and its locals does not end the inquiry. The PANS local may act as PANS’ agent to connect the Town and its employees contractually with PANS for purposes of the PANS Pension Plan. The collective agreements’ pension provisions expressly refer to the “Police Association of Nova Scotia.” So PANS is a disclosed principal. All that is required is authority in advance, either actual (express or implied) or ostensible, or ratifying conduct afterwards. The evidence and the Superintendent’s findings support the conclusion that this contractual connection existed. [80] The Towns’ collective agreements expressly adopted the “PANS” (ie. the parent union’s) Plan. The locals had no pension plan. The Towns’ collective agreements obligated the Towns to contribute to the “PANS” Plan. Under the PANS Plan, only employers who agreed with “PANS” may contribute. The Towns’ collective agreements either obligated or entitled the Towns’ employees to become members of the “PANS” Plan. Under the PANS Plan, “members” and “employees” are those employed by a “participating employer” (e.g. Articles 1.20 and 1.25 of the 1997 Plan - above ¶ 6), meaning an employer who agreed with “PANS”. The object of the Towns’ collective agreement “Pension Plan” provisions was to provide a pension to the Towns’ employees from the PANS Plan. This object is achievable only if there is some contractual nexus with the PANS Plan. The pension provisions of the Towns’ collective agreements are sterile unless the Towns and their employees were connected contractually to the PANS Plan. [81] The parties’ conduct makes it clear that the collective agreements’ pension provisions were not sterile. The Superintendent’s rulings referred to the Towns’ conduct back to the 1980's implementing the PANS Plan. The Towns deducted and remitted employees’ contributions to the PANS Plan’s administrator. The Towns paid the Towns’ employer’s contributions to the PANS Plan’s administrator. The Agreed Statement of Facts, Article 10 says “The police officers employed by the Towns became members of the PANS Pension Plan . . .” (above ¶ 29). According to the Morneau Report, numerous retired former employees of the Towns’ police forces receive pensions from the PANS Plan. None of this would be possible if, as the Towns now argue, their collective agreements with the locals did not contractually link the Towns (and the Towns’ employees) contractually to the PANS Plan. [82] If the Towns’ submission was accepted, the employees’ contributions, deducted and remitted by the Towns over the last two decades, and the Towns’ own contributions, all would have been paid by mistake. Active employees’ vested benefits would vanish. Retirees would have received their accrued pension benefits by mistake and might have to make refunds. These retirees’ ongoing accrued pension benefits would cease. Everything the Towns, their employees, PANS and the locals did to implement the PANS Plan for police officers since the 1980s would have been delusional. [83] At the hearing in the Court of Appeal, the Towns’ counsel acknowledged that the Towns’ submission would mean that the vested pension rights of the Towns’ active employees and retirees would transform into an unjust enrichment claim against contributions, presumably based on legal principles governing payments by mistake. The Towns’ counsel acknowledged that this outcome had not been in the Towns’ contemplation over the past two decades. [84] The Towns’ submission boils down to this. By not ruling that the consequences I have just outlined are inevitable, the Superintendent committed an appealable error. With that submission, I cannot agree. The Towns’ contention balances on the revisionist assumption that the Towns were contractual strangers to PANS for the Pension Plan. But everyone, including PANS and the Towns, acted as if the Towns were contractually intimate with the PANS Pension Plan. [85] The answer to the Towns’ argument, that “PANS” did not sign the collective agreement, is this. The PANS locals signed the collective agreements with actual (express or implied) or ostensible authority from PANS to connect the Towns to PANS for purposes of the PANS Plan. Alternatively, the conduct of the Towns and PANS to implement the PANS Plan established by ratification the agreement between PANS and the Towns to the terms of the collective agreements for purposes of the PANS Plan. Either way, the PANS locals were PANS’ agents, and the terms of the collective agreements signed by the PANS locals became terms of agreement between the Towns and PANS, as principal, for the purposes of the PANS Pension Plan. [86] The Superintendent found “Based on the Towns’ conduct over the past 24 years and the provisions of the collective agreement, it is my opinion that the Towns have agreed and are therefore required to contribute to the Plan.” [87] In my view, the Superintendent’s reasoning was intelligible, her conclusion was within the range of acceptable outcomes, and her decision is reasonable under the SOR. (b) PANS failure to accommodate the Towns in the Plan’s administration [88] The Towns say next that, because PANS did not accommodate the Towns’ involvement in the administration and amendment of the Plan, the Towns were not participating employers. The Superintendent rejected this submission. She noted that the Plan permits local authorities or participating employers to appoint three pension committee representatives and trustees, who administer the Plan and participate in amendments [1981 Plan, Articles 12.1(f), 12.4 and 12.6; 1997 Plan, Articles 10.04(b) and 10.05 – above ¶ 5-6]. If the Towns and PANS disagreed on the Towns’ entitlement to appoint representatives or trustees, the Towns could have sought a remedy by litigation. The Towns did not take that step. The Superintendent concluded that this unresolved issue did not change the Towns’ obligations to contribute under the PBA. In my view, the Superintendent’s conclusion is neither unreasonable nor incorrect. (c) Is the Towns’ agreement limited to the fixed contributions in the collective agreements? [89] The Towns then submit that they agreed to pay only the fixed contributions stated in the collective agreements, and should not have to pay additional deficiency amounts to which they did not agree. The Superintendent rejected this submission. She said that the solvency payments were required by the PBA and the parties may not contract out of these minimum statutory standards. In my view, her conclusion is both reasonable and correct. [90] The PBA s. 62(2)(a) and Regulation 5 say that, when the fixed contributions to a defined benefit plan are insufficient to fund the defined benefit, the employer must pay the prescribed additional contributions to achieve solvency. The legislation intends that an employer who signs on to a defined benefit pension see that the defined benefit is funded, if necessary, by special amortization payments under Regulations 5(2)(c) and 6. [91] Pension benefits legislation establishes floor funding standards from which the parties may not contract out except as expressly authorized by the legislation: Monsanto ¶ 13-15, 38; Buschau ¶ 13,79; Firestone Canada Inc. v. Ontario (Pension Commission) (1990), 1 O.R. (3d) 122 (C.A.) at p. 127; Schmidt v. Air Products Canada Ltd., [1994] 2 S.C.R. 611 at ¶ 33, 45; Kaplan Pension Law, pp. 129-132; Re St. Mary’s Paper Inc. (O.C.A.) at ¶ 14-15, 28, 32. In St. Mary’s, ¶ 32 Justices Arbour and Osborne said: The Act requires that its minimum funding standards be met. It does not allow for special deals which dilute or might eliminate these minimum funding requirements. [92] Sections 4 and 5 of the PBA apply the PBA’s standards to “every pension plan that is provided for persons employed in the Province” except that the parties may negotiate terms “more advantageous to members than those required by this Act and the Regulations.” By ss. 12, 13, 20, 24 and 62, a plan that offends these minimum standards is unregisterable and cannot operate, or terminates and is wound up. Nova Scotia’s PBA enacts minimum funding standards from which, subject to express exceptions discussed below, the employer may not escape by contract. [93] This may well frustrate the employer, particularly Bridgewater here (above ¶ 15), who felt that its contractual limitation was prudent. If the employer wants to limit its obligation only to the fixed contribution, it should agree to a money purchase plan or an employee RRSP account. When, instead, the employer dangles the pension prospect of a defined benefit plan, the PBA’s funding standards spring to attention. [94] If the employer under collective bargaining wants a defined benefit plan that limits the employer’s contributions, the employer should follow Regulation 5(5). Regulation 5(5) says that Regulation 5, prescribing the special payments to amortize the solvency deficiency, “does not apply to a multi-employer pension plan [MEPP] established pursuant to a collective agreement or trust agreement, nor to a pension plan that provides defined benefits under which the obligation of an employer to contribute to the pension fund is limited to a fixed amount set out in a collective agreement.” In these two cases, the employer’s funding obligations are governed by Regulation 8, that does not require the employer to amortize a funding deficiency. Instead, other options are available, including a reduction of benefits or an increase of employee contributions (discussed in Kaplan, pp. 96-8, 418-19). [95] Unfortunately for the Towns, the PANS Plan did not satisfy the conditions for these two exceptions. The Towns signed their collective agreements, agreeing to the PANS Plan, without insisting that the Plan first satisfy the current Regulations 5(5) and 8 or their equivalent predecessors, Regulations 4(5) and 6 of the Pension Benefits Regulations, NS Reg. 269/87. [96] Regulation 5(5) excepts a pension plan that says the employer’s obligation is limited to the fixed contributions stated by the collective agreements. The PANS Plan does not say this. To the contrary, it says that employers must pay the actuarily determined funding deficiency. The PANS Plan and amendments submitted to the Superintendent, in this case, contained the funding provisions quoted earlier (¶ 5-7). The 1981 Plan, Article 4 defined the contributions and said: 4.6 The Employer shall contribute an amount as is required to pay the cost of providing benefits as determined on an actuarial basis over and above that amount referred to in Section 4.5. Article 3.4 of the 1997 restatement, in effect at the date of Morneau’s valuation, was materially the same, including Article 3.4(a): The Employer shall contribute monthly such amounts, if any, as the Employer determines at its sole discretion, provided that: (a) such contributions shall not be less than the amount, if any, indicated by the Actuary as necessary to maintain registration of the Plan under the Act . . . [97] For essentially the same reason the PANS Plan does not satisfy the conditions of a MEPP, mentioned in Regulations 5(5) and 8. Regulation 8(1) states that the MEPP “must include a provision for the funding of pension benefits . . . that sets out the obligation of the employer . . . to contribute in respect of the plan.” Similarly, ss. 15(1), 16(1)(c), (da), (e), (f) and (j), 18(1) and 62(1) of the PBA require that a Plan submitted for registration state the methods for calculating contributions and benefits and the funding mechanism. Sections 12-13 and 20 of the PBA authorize the Superintendent to refuse registration or revoke a non-compliant Plan, after which the Plan terminates operation and winds up. The PANS Plan was not registered as a MEPP. Had it been submitted for registration as a MEPP, to engage the lenient funding standards of Regulation 8, the Superintendent would have declined registration until the PANS Plan was amended. The amendment would have to explain how the Plan’s prescribed contributions and benefits would be adjusted to allow funding in the event of a deficiency. [98] The Superintendent’s confirmation decision of May 12, 2006 discussed Regulation 8: Regulation 8 applies to multi-employer plans or plans where the obligation of an employer to contribute to the plan is limited to a fixed amount set out in a collective agreement. Such plans must include a provision for funding the plan benefits and the provision must set out precisely what is the obligation of the employer to make contributions to the plan. For such plans, Regulation 8(2)(b) states employer contributions to be remitted to the plan may not be less than the amounts required by the collective agreements to be paid by the employer. . . . The Towns have not recognized that Regulation 8 requires the plans to include a provision for the funding of pension benefits and any other benefits provided under the plan that sets out the obligation of the employer to contribute in respect of the plan. Section 3.4 of the PANS Plan provides that the employer shall contribute monthly such amounts, if any, as the Employer determines at its sole discretion, provided that such contributions shall not be less than a) the amount, if any, indicated by the Actuary as necessary to maintain registration of the Plan under the Act; b) not more than permitted under the Income Tax Act (Canada); and c) not less than the contributions made by the members, unless otherwise established through a collective agreement process. The PANS Plan quite clearly states in section 3.4 the requirement of the Towns to contribute the amounts necessary to fund the benefits. It does not limit the Towns’ contributions to those specified in the collective agreements. [99] In my view, the Superintendent’s treatment of the exceptions in Regulation 5(5), and the conditions of Regulation 8, is correct. At the hearing in the Court of Appeal the Towns’ counsel, and counsel for the trustees and the Superintendent, all acknowledged that the Plan was not registered as a MEPP and that the conditions for the operation of Regulation 8 did not exist. (d) Summary [100] In summary, the Superintendent’s decision contains no appealable error under the standards of review. The reviewing judge erred by setting aside the Superintendent’s order. 8. Third and Fourth Issues - Sufficiency of the judge’s reasons and the judge’s finding on PANS’ position re “participating employers” [101] Given my conclusion on the second issue, that the appeal be allowed, it is unnecessary to comment on the third and fourth issues. 9. Conclusion [102] I would allow the appeal and restore the Superintendent’s order. The Trustees did not request costs. Fichaud, J.A. Concurred in: MacDonald, C.J.N.S. Roscoe, J.A.