As a result of today’s difficult economic times, many employers are evaluating their retirement programs and considering how they can reduce benefits. The decision of the New Brunswick Court of Queen’s Bench in Quinn v. New Brunswick (Minister of Finance) contains guidance on the common law analysis to be applied when considering a potential option to eliminate indexing.
Continue Reading...The Ontario government recently filed regulations under the Pension Benefits Act (the PBA), which implement funding changes for jointly sponsored pension plans (JSPPs) and certain public sector plans, as well as more general changes applicable to all defined benefit (DB) plans.
Continue Reading...Another recent decision of the Ontario Court of Appeal, in Ault v. Canada, has continued the trend in jurisprudence to hold plan administrators and others who are responsible for communicating with pension plan members to a very high fiduciary standard, including a legal duty to disclose accurate information about the implications of any elections made by members.
Continue Reading...The Supreme Court of Canada has affirmed decisions by the British Columbia Supreme Court and Court of Appeal that provisions of the Public Service Superannuation Act (PSSA) and the Canadian Forces Superannuation Act (CFSA), which reduce a supplementary death benefit (SDB) based on the member’s age at the time of death, do not infringe section 15 of the Canadian Charter of Rights and Freedoms.
In Withler v. Canada (Attorney General), a class proceeding was initiated by the surviving spouses of deceased members entitled to benefits pursuant to the PSSA and the CFSA. The spouses received a SDB upon the death of the member. The SDB was reduced due to the age of the member at death, pursuant to provisions in the PSSA and the CFSA which permitted a 10% reduction in death benefits for every year the age of the plan member exceeded 65 (PSSA) or 60 (CFSA) at the time of death. In advancing their claim, the spouse’s argued that the SDB reduction created a distinction and imposed a disadvantage on member spouses based on age, contrary to s. 15(1) of the Charter.
Continue Reading...Late last week, the Ontario government announced that it would provide temporary solvency funding relief to certain public sector and broader public sector (BPS) pension plans. Obtaining such relief, however, will not be an easy matter. The government has made it clear that in an effort to ensure that these plans are sustainable in the long term, there will be many “hoops” for plan sponsors to jump through.
Continue Reading...Later this month, the Supreme Court of Canada will hear an appeal from the British Columbia Court of Appeal’s decision in Withler v. Canada. The issue in Withler is whether a supplementary death benefit under a pension plan that is reduced for every year the plan member’s age exceeds a specified age violates the right to equality under section 15 of the Charter.
If the Supreme Court overturns the Court of Appeal decision and rules that this death benefit is discriminatory and contrary to the Charter, public sector plans which use age-based criteria to calculate certain benefits could find themselves facing a similar Charter challenge. Similarly, an adverse ruling by the Supreme Court could potentially be used in the private sector as a new basis to argue that the use of age-based criteria in pension plans violate provincial and federal human rights legislation.
The Withler case arose as a class proceeding, which was initiated by the surviving spouses of deceased members of the Public Service Superannuation Act (the PSSA) and Canadian Forces Superannuation Act (the CFSA). The spouses received a supplementary death benefit (SDB) upon the death of the member, the amount of which differed depending on the age of the plan member. Provisions in the PSSA and the CFSA permitted a 10% reduction in death benefits for every year the plan member exceeded age 65 (for the PSSA) or age 60 (for the CFSA). The surviving spouses argued that the reduction provisions constituted age discrimination, contrary to s. 15 of the Charter.
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