The shift to hybrid and remote work models during the ongoing coronavirus pandemic is one of several issues impacting pension plan and group benefits administrators in 2022, said Michael Wolpert, a pensions and benefits lawyer at Fasken Martineau DuMoulin LLP, during a webinar on Jan. 13 hosted by the Canadian Pension & Benefits Institute.
Specifically, he highlighted the challenges posed by remote working arrangements and the potential for two classes of employees — those who are still working in their province of residence and those working outside of it.
“What impact will it have on pension plans and the reach of legislation? What if someone is working for you but they’re situated in a different province or out of the country? It’s a cause for concern for pension regulators and plan administrators, depending on where things go and whether we return to traditional models of work.”
Wolpert said hybrid and remote working models also pose challenges for benefits plans. “With remote work and employees who are out of the country, are they still covered under group insurance? And what is meant by someone being actively at work? We’re not yet sure and I’m sure we’ll see some [legal] challenges.”
He also highlighted the potential for increased legal challenges stemming from the Supreme Court of Canada’s 2020 decision in Fraser v. Canada, in which the court sided with three retired Royal Canadian Mounted Police members. The three female claimants said they were denied a portion of their pension benefits because they returned to work following maternity leave through a job-sharing program that the RCMP deemed equivalent to part-time work and ineligible for coverage under its pension plan.
“[Fraser v. Canada] in particular will lead to challenges of not just discrimination on the basis of sex, but also could arise in cases involving disability — and there’s other cases where we still may see traditionally accepted models of pension administration challenged. Similarly, human rights and charter challenges are going to arise on the benefits side as well. People come up with new issues to challenge.”
Similar to other sectors, cybersecurity is becoming a key issue in service provider agreements for plan sponsors, as hacking and ransomware incidents increase, said Wolpert. “Some of these issues are being addressed through data privacy agreements and stand-alone agreements within the body of the agreement. . . . Group benefits plans deal with huge amounts of employee data and that data is subject to hacking. It’s critical that those issues are addressed in discussions with providers and others that are looking after benefits.”
As well, he highlighted an increasing focus on joint governance of pension plans, especially in unionized industries where pensions are becoming more of a bargaining issue. “There’s an increasing number of grievances related to pension issues, but it’s quite possible to sit down and allow some degree of joint governance, even if it’s not directly in the plan, by allowing unions to participate through their advisors, in terms of plan amendments and communications. It doesn’t have to be an adversarial situation and can benefit both the employer and employees.”