Amendment limiting pension transfers based on age constituted discrimination but was permitted under human rights legislation: NB Labour and Employment Commission
June 26, 2026
Note: This news summary is based on an automated English translation of a decision written in French.
The New Brunswick Labour and Employment Commission (the “Commission”) has ruled that a pension plan amendment eliminating commuted value transfer options for members aged 55 and older was an age-based distinction that gave rise to prima facie discrimination, but that the distinction fell within a statutory exception under the New Brunswick Human Rights Act (the “HRA”). As a result, the HRA’s prohibition on discrimination did not apply to the distinction.
The complaint in this matter was filed by a unionized former employee (the “Complainant”) of the University of Moncton (the “University”) who resigned from his position at the University to take a job with the federal government. After he resigned, the Complainant asked the University to transfer the commuted value of his pension to the federal pension plan. The University refused to complete the pension transfer due to a 2019 amendment to their pension plan which limited such transfers to members under the age of 55. The employee was 57 years old at the time of the request.
The Complainant then filed a complaint with the Commission, arguing that the amendment constituted age-based discrimination contrary to the HRA. He also requested that the amendment be revoked.
A central issue before the Commission was the scope of the statutory exception outlined at section 4(6)(a) of the HRA. That provision operates as an exception to the HRA’s prohibition on age discrimination in employment, specifically with respect to certain age-based distinctions arising from the terms or conditions of a pension plan. One interpretation was that the exception applied only to rules that directly cause a termination of employment, such as provisions mandating retirement at a specified age under the terms of the pension plan. The alternative interpretation was that the exception also extends to pension plan provisions that are triggered by, and functionally connected to, the cessation of employment, including the post-termination asset transfer restrictions implemented by the University. In reviewing the matter, the Commission made the following findings:
- The plan’s actuary determined that commuted value transfers occurring closer to retirement age (65) had a particularly negative financial impact on the plan because of the increased cost of the commuted value payments required for such transfers. As a result, the University’s pension committee had amended the plan to restrict transfers to members under age 55.
- The Superintendent of Pensions confirmed in a letter dated March 2, 2022 that the amendment met the New Brunswick Pension Benefits Act (“PBA”) requirements.
- Section 4(6)(a) of the HRA provides an exception from the prohibition on discrimination in employment where “the termination of employment or a refusal to employ [is] because of the terms or conditions of any bona fide retirement or pension plan”.
- Section 4(6)(a) does not clearly limit the scope of its exception only to pension plan rules that directly cause termination. Further, pension transfer rights are both legally and functionally connected to the cessation of employment. Finally, section 4(6)(a) is intended to permit certain age-based distinctions that are necessary to maintain the financial viability of pension plans. The plan’s restriction on transfers operates only upon termination of employment and is thus functionally connected to termination of employment. Therefore, it engages the exception provided under section 4(6)(a) of the HRA.
- The plan is “bona fide” given its registration under the PBA and its objective of providing retirement benefits.
Thus, the exception in section 4(6)(a) applies to the plan’s age-based restrictions on pension transfers, such that while they are prima facie discriminatory, the prohibition on discrimination does not apply to them. The New Brunswick Labour and Employment Commission therefore dismissed the complaint.
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