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A proposed $10-million class action lawsuit alleges that Sun Life Assurance Company of Canada knowingly miscalculated benefits paid to federal employees receiving long-term disability (LTD) payments.

The claim, filed by Connolly Obagi LLP, alleges that Sun Life miscalculated cost-of-living increases in LTD benefits paid to Giulia Belec, an Ontario woman who was employed by the federal government for 37 years until her medical retirement in August 2011.

Connolly Obagi alleges that Sun Life calculated Belec’s cost-of-living increases based on her net LTD benefit after deductions, rather than on her gross LTD benefit before deductions. The claim also alleges that Sun Life knew its calculations were contrary to the terms of the LTD policy.

None of the allegations have been proven.

Proposed class members include anyone employed by the federal government who received LTD benefits through Sun Life group policy 12500-G from April 30, 1997, to the present date. Connolly Obagi is seeking $10 million in punitive and exemplary damages.