Termination of LTD Benefits at Age 65 Not Age Discrimination

The British Columbia Human Rights Tribunal recently released an important decision on the issue of whether or not negotiated long term disability (LTD) plans which require cessation of benefits at age 65 are contrary to the provisions of the BC Human Rights Code which prohibit age discrimination. In Johnston obo others v. City of Vancouver (No. 2)the Tribunal found that the disability plan negotiated by the City and one of its unions, in which eligibility for LTD benefits ceased at age 65, was a bona fide plan and therefore permissible under the Code.

Following the elimination of mandatory retirement in BC, and an amendment to the definition of “age” under the Code in 2008, employers have been charged with re-evaluating their practices to remove age-related restrictions that are not permitted under the Code. Section 13(3)(b) of the Code permits discrimination on the basis of age for “the operation of a bona fide retirement, superannuation or pension plan or to a bona fide group or employee insurance plan”.

In this case, the City presented actuarial evidence that it was a “common, accepted, and established practice” for a wide variety of disability plans, both insured and self-insured, to terminate disability benefits at age 65. The evidence further suggested that extending benefit coverage beyond age 65 “could result in a significant increase in contribution rates”.

The Tribunal’s analysis focused on what qualifies as a bona fide plan. The adjudicator found that for a plan to be bona fide it must be a legitimate plan, adopted in good faith and not for the purpose of defeating protected rights. The question of whether a plan is reasonable does not inform whether a plan is bona fide, an element that had been considered in Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321 but was revisited in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45.

For employers, this case serves as an important clarification as to the test the Tribunal will apply in examining claims that benefit plans with age-related restrictions fall within the protection offered by Section 13(3)(b).

Johnston obo others v. City of Vancouver (No. 2), 2015 BCHRT 90

Questions relating to the content of the article may be directed to Kacey Krenn.