Court dismisses challenge to raising retirement age

The Court of Appeal for British Columbia upheld a lower court ruling that dismissed a challenge to a pension fund’s decision to raise the normal retirement age from 62 years to 65 years in the face funding concerns.

Members of the B.C. Credit Union Employees’ Pension Plan sued the pension fund and its trustees after they decided in 2016 to increase the retirement age specified under the plan in an effort to curb the plan’s costs and shore up its solvency.

In that lawsuit, the plan members alleged that the trustees breached their fiduciary duties, failed to consider all relevant factors in their decision to raise the retirement age, and failed to warn them about a solvency deficit in the funding of the pension plan.

In April 2022, a lower court judge dismissed the action, finding that the trustees didn’t breach their obligations to the plan members, and that there were no grounds to interfere with their decision to raise the retirement age.

On appeal, the plan members argued that the lower court judge erred in that ruling.

However, the court dismissed the appeal, finding that the plan members failed to establish that the lower court judge committed any reviewable error.

“The judge properly outlined the applicable legal framework. His reasons show a careful review of the terms of the trust agreement and the evidence of the trustees’ deliberations, and his findings were grounded in the evidentiary record before him,” the appeal court said in its decision released on March 14.

While the court acknowledged that the decision to raise the retirement age would impact plan members, particularly those approaching the original retirement age of 62, it noted that the trustees considered the fact that people are living longer and collecting benefits over a longer period in making their decision to raise the retirement age.

“After all, the trustees’ duties in relation to preserving the solvency of the plan included the going concern approach, that is, attempting to preserve the financial viability of the plan not just for the present and immediate future, but also beyond,” Justice Patrice Abrioux wrote for the appeal court in its unanimous ruling dismissing the appeal.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.