HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Lilie Ying
Applicant
-and-
Canadian Commercial Workers Industry Pension Plan and Financial Services Commission of Ontario
Respondents
DECISION
Adjudicator: Brian Cook
Indexed as: Ying v. Canadian Commercial Workers Industry Pension Plan
WRITTEN SUBMISSIONS
Lilie Ying, Applicant
Self-represented
Canadian Commercial Workers Industry Pension Plan, Respondent
Anthony Guindon, Counsel
Financial Services Commission of Ontario, Respondent
Shemin Manji, Counsel
Introduction
1This is an Application filed under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination in the operation of a pension plan on the basis of age.
2In a Case Assessment Direction dated January 4, 2012, the Tribunal invited the parties to make written submissions on the issue of whether the Tribunal has jurisdiction to deal with the Application. Submissions from all the parties were received in February 2012.
Background
3The applicant was employed in a grocery store for 23 years. Originally, the store operated as an A&P store and later it became part of the Metro grocery store chain. The store closed in October 2009 and the applicant was laid off. The effective date of the termination of her employment was October 31, 2010. As of that date, the applicant was 48 years of age.
4During her employment, the applicant was a member of the Canadian Commercial Workers Industry Pension Plan (the “Plan”). Because she did not subsequently work for another employer participating in the Plan, her participation in the Plan ended on October 31, 2010, when her employment ended.
5Had the applicant been over 50 years of age as of October 31, 2010, she would have been eligible for a reduced early retirement pension. Because she was under 50 years of age, she was not entitled to an early retirement pension under the terms of the Plan and was instead entitled to either a transfer of the commuted value of the pension or a deferred pension, payable upon reaching the age of 65. This is the basis of the applicant’s allegation of discrimination on the basis of age.
6In the period just prior to October 31, 2010 when the applicant stopped work, the Plan submitted a “funding improvement plan” to the Superintendent of Financial Services in respect of the operation of the Plan in Ontario. The Plan made similar submissions in other Provinces. The effective date of the changes to the Plan in Ontario was September 1, 2010. Under the terms of the Ontario funding improvement plan, the value of some pensions under the Plan changed. The pensions of members who were already in receipt of a pension were not affected. Members who were 50 years of age but no longer active members of the Plan (i.e. members who were not employed in employment with ongoing contributions to the Plan, or who were “deferred vested members”), and who thus qualified for an early retirement pension, were also not affected.
7As of September 1, 2010, the group of members who were most directly affected were members who were under 50 and not active members because they were not contributing to the Plan. The value of the vested pension of members for members of this group was significantly reduced. Also affected were members like the applicant who subsequently became inactive members and who were not 50 when that occurred. The applicant became an inactive member on October 31, 2010, when her employment ended
8The applicant submits that the changes to the Plan resulted in discriminatory treatment of groups of Plan members based on age.
9The respondents submit that the differential treatment is authorized by the legislative scheme. They also submit that the funding improvement plan that led to the changes was approved by the Superintendent of Financial Services and that this Tribunal does not have the jurisdiction to review decisions of the Superintendent of Financial Services.
The Pension Plan
10The Canadian Commercial Workers Industry Pension Plan (CCWIPP) is a defined benefit, multi-employer pension plan. According to the submissions of the CCWIPP, the Plan has over 290,000 members and manages assets of over $1.4 billion. The respondents state that the Plan is underfunded and that as a result, a funding improvement plan was required. The respondents state that without the funding improvement plan, the Plan could have ceased to be viable. The funding improvement plan resulted in reductions to the value of the pensions of some of the members. As noted above, in Ontario, the group that was primarily affected consisted of people who, like the applicant, were not working and contributing to the Plan and who were therefore not active members, and who were under 50 years of age in 2010 when the changes took effect.
11The funding improvement plan reduced the value of the applicant’s deferred pension by 43% and her deferred pension had a commuted value of just over $16,000. The applicant elected to transfer the commuted value instead of waiting to receive a deferred pension at age 65.
12The funding improvement plan, including the resulting benefit reductions, was submitted for approval to the Superintendent of Financial Services. Members of the Plan, including the applicant, were invited to make submissions. The Superintendent issued a Notice approving the changes on May 26, 2011. The applicant did not participate in the approval process before the Superintendent.
13The applicant filed the Application with this Tribunal on July 4, 2011. She alleged that the changes to the Plan were discriminatory because they affected people like herself who were under the age of 50 differently than people over 50. She also alleges that the Superintendent of Financial Services discriminated against her by endorsing the changes.
The Legislative framework
14Section 5(1) of the Code provides as follows:
- (1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, family status or disability.
15Section 25 of the Code provides in part as follows:
(2.1) The right under section 5 to equal treatment with respect to employment without discrimination because of age is not infringed by an employee benefit, pension, superannuation or group insurance plan or fund that complies with the Employment Standards Act, 2000 and the regulations thereunder.
(2.2) Subsection (2.1) applies whether or not a plan or fund is the subject of a contract of insurance between an insurer and an employer.
(2.3) For greater certainty, subsections (2) and (2.1) apply whether or not “age”, “sex” or “marital status” in the Employment Standards Act, 2000 or the regulations under it have the same meaning as those terms have in this Act.
16Section 44(1) of the Employment Standards Act, 2000, S.O. 2000, c. 41, as amended (ESA), prohibits an employer from providing a pension plan that differentiates on the grounds of age unless the differential treatment is permitted in a Regulation to the ESA.
17Subsection 4(1) of Ontario Regulation 286/01 made under the ESA provides in part as follows:
4(1) The prohibition in subsection 44(1) of the Act does not apply in respect of a differentiation that is made on an actuarial basis because of an employee’s age and that relates to,
(e) benefits payable to employees, if the Pension Benefits Act
(i) permits the differentiation, or
(ii) does not apply to the pension plan.
18Subsection 4(3) of the Regulation provides:
4(3) The prohibition in subsection 44(1) of the Act does not apply with respect to a provision in a pension plan that makes a differentiation because of age in establishing a normal pensionable date for voluntary retirees or an early voluntary retirement date or age, unless,
(a) the Pension Benefits Act applies to the plan; and
(b) the plan contravenes the provisions of that Act respecting normal retirement dates and early retirement pensions.
19The Pension Benefits Act, R.S.O. 1990, c.P.8, as amended (PBA) sets out minimum requirements respecting normal retirement and early retirement dates. Section 35(1) provides as follows:
- (1) The normal retirement date under a pension plan submitted for registration after the 1st day of January, 1988 shall not be later than one year after the attainment of sixty-five years of age.
20Section 41(1) of the PBA provides as follows:
- (1) A former member is entitled to elect to receive an early retirement pension under the pension plan if he or she,
(a) terminated employment on or after the 1st day of January, 1988;
(b) is entitled to a deferred pension under this Act; and
(c) is within ten years of attaining the normal retirement date.
21Under section 35(1) of the PBA, the normal retirement date for a member must be no later than one year after the member turns 65. Under section 41(1) of this Act, to be entitled to a deferred pension, the member must be within ten years of the normal retirement date.
22By the combined operation of subsection 25(2.1) of the Code, subsection 44(1) of the ESA, subsection 4(3) of O. Reg. 286/01, and sections 35(1) and 41(1) of the PBA, the Code prohibition on age-based distinctions does not apply to the establishment of normal and early retirement dates provided that the normal retirement date under a pension plan is not more than 66 years of age and the early retirement date is not more than ten years before the normal retirement date. The PBA permits the establishment of earlier normal retirement dates and earlier early retirement dates. The Plan in this case established a normal retirement date of 65 and an early retirement date of 50.
Analysis and Conclusions
23It is understandable that the applicant perceives that she was discriminated against on the basis of her age. If she had been over 50 instead of 48 at the time the funding improvement plan took effect, the value of her pension would not have been as significantly decreased as it was. However, it appears that the factors that in fact triggered the differential treatment were the applicant’s employment status and the fact that she was not eligible for a deferred pension.
24If the applicant had remained an active member of the Plan (e.g. by securing alternate employment with an employer that participated in the Plan), the value of her pension would not have been impacted. It was the fact that she was no longer employed in employment in which the employer participated in the Plan that placed her in the category of members who had the value of their pension significantly reduced. While this might well seem unfair to the members who were affected, the differential treatment arises on the basis of the applicant’s employment status as she was no longer an active member of the Plan. Employment status is not a Code-protected ground.
25The other factor that affected the applicant was that she was not eligible for a deferred pension. If she had been eligible for a deferred pension, the value of her pension would not have been reduced in the way it was, even if she was not in employment with an employer who participated in the Plan. It is clear that this differential is age-based. If the applicant had been 50 she would have been eligible for a deferred pension and because she was under 50 she was not eligible.
26This is a differential that is permitted by the Code. As discussed earlier, section 4(3) of O. Reg. 286/01 specifically permits age differentiation in establishing a normal pensionable date for voluntary retirees or an early voluntary retirement date or age provided that those dates comply with the minimum standards in the Pension Benefits Act regarding the dates for normal and early retirement. The Plan in this case meets those minimum standards.
Decision
27The Tribunal does not have jurisdiction to deal with the Application. Through the combined operation of section 25 of the Code, the ESA and O. Reg. 286/01 and the PBA, differential treatment based on age in the operation of a pension plan based on the establishment of a normal retirement date that is no more than the date the plan member turns 66 and an early retirement date that is no less than ten years before the early retirement date is permissible and exempt from the operation of the Code.
28Given this finding, it is not necessary to determine if the Tribunal has jurisdiction to consider whether the decisions of the Superintendent of Financial Services in this case were discriminatory.
29The Application is dismissed.
Dated at Toronto, this 27th day of June, 2012
“signed by”
Brian Cook
Vice-chair
CORRECTION
The decision released on 27 June, 2012 mistakenly refers to the Superintendent of Financial Services (in paragraphs 6, 9 and 28) as the “Superintendent of Insurance”. The error is corrected.
Dated at Toronto, this 16th day of July, 2012.
“signed by”
Brian Cook
Vice-chair