In a decision released yesterday, Withler v. Canada (Attorney General), 2008 BCCA 539, the Court of Appeal considered the constitutionality of supplementary benefits under Public Service Superannuation Act, and the Canadian Forces Superannuation Act.
Both pension plans provide members with group life insurance, but the amount payable on the death of a member is reduced after a certain age. The death benefits payable under the Public Service plan equals twice the annual salary of a member who dies before the age of 66. If the member dies after the age of 66, the death benefit is lower. Beginning at the 66, the payment is reduced by 10% a year. The Canadian Services plan is similar except that the payouts are reduced beginning at the age of 61.
A class action lawsuit was brought on behalf of spouses and partners of deceased members who received a reduced benefit. They argued that the legislation violates section 15(1) of the Canadian Charter of Rights and Freedoms, which says:
15.(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
At trial, Madam Justice Garson held that these provisions of the pension plans did not violate section 15(1), and dismissed the claims.
The plaintiffs appealed to the British Columbia Court of Appeal. Madam Justice Ryan, writing for herself and Madam Justice Newbury agreed with the trial judge, and upheld the legislation. Madam Justice Rowles dissented, and would have declared the relevant provisions unconstitutional.
The majority judgment considered the benefits in the context of the overall pension scheme. Although the spouses of seniors received lower death benefits based on the members’ age, they received survivor pensions and other benefits not available to the spouses of younger members. Madam Justice Ryan wrote at paragraph 181:
 This case demonstrates the difficulty that arises when one attempts to isolate for criticism a single aspect of a comprehensive insurance and pension package designed to benefit an employee’s different needs over the course of his or her working life. The trial judge concluded that, viewed in context, the supplemental death benefit was the part of a larger scheme comprised of group insurance and pensions designed to look after the changing needs of an employee as he or she remained in the workforce and then retired. At the younger ages, the supplementary death benefit provided a limited stream of income for unexpected death where the surviving spouse is not protected by a pension. At older ages, the purpose of the supplementary death benefit is for expenses associated with last illness and death. The comprehensive plan, while not a perfect fit for each individual, did not meet the hallmarks of discrimination given that it was a broad-based scheme meant to cover the competing interests of the various age groups covered by the plan.
[Since I first published this post, the Supreme Court of Canada dismissed an appeal of this decision. See my post on the Supreme Court of Canada decision here.]