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Mandatory Retirement Impacts LTD


The end of mandatory retirement may soon start raising issues when it comes to long-term disability coverage, says Jeremy Bell, of George & Bell Consulting. He told the ‘Aging and the Future of Group Benefit ‒ Public Sector’ session at the 2013 CPBI Pacific Regional Conference as workers age, the incidence of LTD claims increases. However, under current practices, they do not collect LTD for long. Instead, at age 65 to move to their old age benefits. However, “Canadian workers don't come with a best before date stamped on their forehead,” he said. Now, they can claim they plan to return to work so the LTD coverage should continue. In Manitoba, the human right commission questioned when the employee status changed to retired if the employer had not made plans for retirement. Since they get old age benefits, it is not discriminatory to end LTD coverage, but if they plan to return to work, it would be discriminatory to end this coverage. With human rights decisions starting to protect workers over age 65 and the Old Age Security eligibility changing to age 67, it gives reasons to change this, he said. One solution is case by case extensions, but this comes with complications and is difficult to interpret. A worker could argue that LTD should cover the period they intend to work and they intend to work until they are 80, he said.

Courtesy of Benefits and Pensions Monitor website News Alerts

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