It’s time for a rethink around LTD coverage for older employees

Plans that only pay benefits for workers under 65 could face age-discrimination claims
By Jeremy Bell
|Canadian HR Reporter|Last Updated: 05/20/2014

Employers and unions should re-think long-term disability (LTD) benefits for employees over age 65 because a common provision — only paying benefits to those younger than 65 — may be susceptible to age-discrimination claims. Sponsors and unions should proactively consider plan options to avoid reacting later.

Many health and welfare benefits, as well as defined benefit (DB) pensions, have elements of age discrimination — in favour of older workers. For example:

Likelihood of death increases with age: With a fixed-death benefit, a 64-year-old receives about 10 times the value a 25-year-old would from a group life plan.