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Exclusion of post-65 employee benefits ruled as violation of Canadian Charter of Rights and Freedoms

An in-depth look at this and other subjects are covered in the current issue of the Morneau Shepell News & Views

TORONTO, July 19, 2018 /CNW/ - Morneau Shepell released the July 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: an Ontario human rights tribunal's ruling that finds exclusion of post-65 employee benefits discriminatory, British Columbia's recommendation for insured long-term disability (LTD) plans, Quebec's adoption of Bill 176 prohibiting "orphan" clauses and the impact of recent family and estate law cases on pension plan administration.

  • Ontario rules exclusion of post-65 employees benefits as discriminatory – A ruling by the Ontario Human Rights Tribunal stated that exemptions in the Ontario Human Rights Code that permit employers to exclude post-65 employees from employment benefits were contrary to the Canadian Charter of Rights and Freedoms, and the usual prohibitions on age discrimination should be applied. If upheld by the courts, employers could be required to add employees to their benefits plan or demonstrate that the termination of benefits for those over 65 is reasonable. Employers failing to do so will face potential human rights complaints.
  • British Columbia recommends insurance for long-term disability plans – In March 2018, the British Columbia Ministry of Finance released a "Preliminary Recommendations" document following review of the province's Financial Institutions Act and Credit Union Incorporation Act. The document included a recommendation to require employee long-term disability (LTD) plans to be insured, with exemptions for employers with low risk of insolvency. The proposal will potentially affect all employers with provincially regulated employees in British Columbia who currently offer self-funded LTD arrangements.
  • Quebec National Assembly adopts Bill 176 – On June 12, 2018, Bill 176, An act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family-work balance ("the Act"), was adopted by the Quebec National Assembly. The Act prohibits "orphan" clauses, which are differences in treatment in pension plans or other employee benefits for those who perform the same task in the same establishment based solely on the employee's hire date. In addition, Bill 176 amends and expands leave periods to which Quebec employees are entitled.
  • Court rulings demonstrate effect of family and estate law on pension administration – The rulings of two recent pension administration cases, Cotnam v. Rousseau and Kraft v. Kraft, highlight the impact that family and estate situations can have on pension plan administration. The court rulings, involving a dependent child and a former spouse, respectively, provide additional protections for those claiming pension benefits, demonstrating that family and estate law can take precedence over the usual rules of plan administration.
  • Tracking the funded status of pension plans as at June 30, 2018Morneau Shepell shared the changes in the financial position of a typical defined benefit plan with an average duration since December 31, 2017. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
  • Impact on pension expense under international accounting as at June 30, 2018Morneau Shepell showed the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the pension expense has decreased by one per cent (for a contributory plan) due to an increase in discount rates.

About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 4,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.

SOURCE Morneau Shepell Inc.

For further information: Heather MacDonald, Morneau Shepell, 416.390.2625, hmacdonald@morneaushepell.com