© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the July 2005 edition of BENEFITS CANADA magazine.
New legislation and a landmark court ruling raise tough questions.
By Don Bisch

Some things are just inevitable. Life’s two great certainties—death and taxes—are the most obvious examples. But there are others. Last month, for instance, provided two illustrations of changes that were just bound to happen.

The first was the introduction in Ontario of legislation banning mandatory retirement. Other provinces have already gone that route. Others are sure to follow.

It’s a basic human rights issue—you can’t keep qualified people from working for a living just because they’ve surpassed an arbitrary age threshold. It also has a lot to do with demographics. With a large portion of the workforce approaching retirement, employers need people to work longer.

The other inevitability was the Supreme Court of Canada’s decision in Chaoulli and Zeliotis vs. Quebec. Again, individual rights won the day—the court ruled that Quebec’s health and hospital insurance laws violate the Quebec Charter of Human Rights and Freedoms. When the public health system is unable to provide medically necessary healthcare services in a timely manner and patients are languishing on waiting lists, the government simply can’t forbid its citizens from buying those services elsewhere. If it hadn’t happened in Quebec, it would have happened somewhere else.

But just as both death and taxes have enormous consequences, so too will these developments. Pension and benefits plan sponsors, in particular, will feel the effects in the years to come.

In the case of banning mandatory retirement, the legislation will raise a raft of plan design questions since many benefits and pension plans assume retirement at age 65. Will flexibility need to be built into pension or benefit plans for workers 65 years and older if they choose to continue to stay on the job?

Will removing the age 65 cap in the Ontario Human Rights Code leave standard pensions and benefits practices, such as basing eligibility for pension benefits on reaching a certain age, vulnerable to human rights challenges? Will LTD claimants be entitled to disability payments indefinitely? And will employees even want to work that long, or will they opt for early retirement?

The Chaoulli decision also raises more questions than it answers. Will new private clinics offering medically necessary hip replacements, cancer treatments and diagnostic scans pop up all over the country? If so, will employers begin offering their plan members coverage for these services(as many already do for their senior executives)? Or will employers— already faced with climbing healthcare costs—steer clear of any added healthcare commitments?

Whatever the answers to these questions, there will be a great deal of debate surrounding these issues and their implications in the months ahead.

Of that, you can be sure.

Don Bisch

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