The elderly are sometimes targeted by stereotypes in the workplace. For example, mandatory retirement laws are based in part on the presumption that the older we get the less we are able to make a valuable contribution to society. For this reason, courts have often declared discriminatory any legislation or practice that allows employers to dismiss employees based solely on age, without any consideration for their abilities and capability to perform the work. In two recent decisions, courts dealt with the issue of discrimination based on age in an entirely different context: that of the pension plan. In both of the cases discussed below, a court concluded that the challenged provisions did not impose mandatory retirement, they only set a deadline for accumulating retirement benefits, which in and of itself is not a discriminatory practice.

In many ways, pension plans represent the archetype of age-based discrimination. By their very nature, pension plans are designed to provide a source of income to workers once they reach a certain age. Such notions as “normal retirement date”, “normal annuity”, “early retirement” and “postponed retirement annuity” are established based on the age of the plans’ participants. What is more, the rights and benefits of these pension plan participants are typically determined based on the age category to which they belong. Sixty-five has always been considered the “magic” age for public and most private pension plans.

In the last few decades, we have seen major progress in legislation governing rights and freedoms and a consistent application of antidiscrimination provisions by the courts, and we have also seen the duty to accommodate being given an increasingly important role. Despite this era of rights and freedoms charters, till now pension plans seemed to enjoy immunity against attacks alleging discriminatory wording or practices based on age. Pension plans have for the most part successfully navigated this complex and often tumultuous legal environment.

Perhaps this is partially due to the protection afforded by various statutes that effectively shield pension plans and other benefit plans from proceedings or complaints based on rights and freedoms charters. Another reason could be that tribunals understand the vital economic role of pension plans in our society, and that age will always play an important part in their stability But that said, two recent cases illustrate how determined employees can use discrimination based on age to attack a number of pension plan features to claim discrimination.

Indeed, a group of eight (8) professors from McGill University recently instituted an action alleging that the university’s pension plan was discriminatory and violated the Québec Charter of Human Rights and Freedoms.1 They claimed that they had been discriminated against due to their age, seeing as the university did not amend its pension plan to allow participants to continue contributing and accumulating years of service until the age of 71. The action followed amendments to the federal tax legislation in late 2007 that increased the maximum age for making contributions to pension plans from 69 to 71, and allowed pension annuities to be paid only as of the age of 71. Under these new tax rules, holders of pension plans may amend the wording of their plans in order to allow employees to continue participating until or begin receiving their annuity at the age of 71, and this without any negative tax consequences. McGill University chose to extend the mandatory years of service for pension annuities to 71 years of age, but left the wording of its plan unchanged as far as contributions are concerned, which implied that contributions could no longer be made after 69. In short, the professors from McGill University claimed before the Superior Court that by not amending the pension plan to reflect the new taxation rules that allow for two additional years of service between 69 and 71 years of age, the university was continuing to illegally exclude participants over the age of 69. The Superior Court dismissed these arguments on the ground that distinctions based on age are justified under provincial legislation, and that there is no discrimination in refusing to grant two additional years of service. According to the court, the reason legislators adopted the Supplemental Pension Plan Act was to prevent age-based benefits from being declared illegal under the Québec charter.

In the second case, two lawyers working for the federal Department of Justice went further than the McGill University professors.2 They questioned the wording of the plan that authorized contributions until the age of 71 and set the mandatory years of service for the annuity to no later than 71 years of age, in accordance with the new tax rules. As the federal civil servants’ pension plan also allowed them to accumulate a maximum of 35 years of service, these lawyers claimed that they were discriminated against because they had turned 71 before accumulating the maximum years of service. Consequently, they were allegedly deprived of the opportunity to obtain the maximum annuity under the plan, contrary to the Canadian Charter of Rights and Freedoms. The Federal Court also dismissed these allegations and maintained that it is necessary to make distinctions based on age in retirement plans.

While the outcome of these two decisions confirms that pension plans are partially protected against allegations of discrimination based on age, they also show that discrimination in pension plans cannot be dismissed out of hand. As Canadian society evolves, we can expect renewed attacks against distinctions based on age, both in pension plans and other benefit plans. New measures are adopted by legislators and employers, such as those relating to progressive retirement that came into force last year, which incite workers to remain in the workforce as long as possible. It remains to be seen whether these older workers will demand the same advantages and benefits as their younger colleagues.