Ontario arbitrator rules construction materials company must cover cost of retirement benefits for early retirees who defer their pension payments
February 13, 2024
An arbitrator has ruled that a construction materials company must cover the cost of retirement health benefits for early retirees who defer their pension payments.
An employee retired early at age 55 and contemplated delaying receiving pension payments until 65. The employer contended that by deferring pension payments, the employee will not be officially "retired" but rather will be considered to have "resigned." Consequently, the employer believed the employee would not be eligible for retirement benefits during this period. The union filed a grievance contending that employees who retire early and defer pension payments should receive retirement health benefits from 55 to 65.
The arbitrator reviewed the relevant provisions of the collective agreement and pension plan and concluded that employees who retire early and defer pension payments are considered “retired” and entitled to all the same retiree benefits and those who do not defer their pension payments.
In reaching this conclusion the arbitrator noted that the collective agreement and pension plan do not distinguish retirees based on those who defer their pensions and those who do not. Consequently, the arbitrator concluded that the early retired employees who deferred commencement of their pension payments, still qualify as pensioners and retirees under the particular collective agreement and pension plan, entitling them to retiree health benefits.
Click on more information below to read the arbitrator's decision:
