Which of the following statements about pension earnings and reasonable notice damages is true?

• A. Pension earnings do not reduce reasonable notice damages.
• B. Pension earnings always reduce reasonable notice damages.
• C. Pension earnings have no impact on any severance calculation.
• D. Pension earnings only reduce damages if the employee is over 60.

Answer: (A)

Pension earnings don’t offset or reduce the damages you’re awarded for a wrongful dismissal. When calculating reasonable notice damages, the goal is to compensate for income and benefits you would have received during the notice period if you had remained employed. Pension payments themselves are retirement income that would be paid after, not during, the notice period, so they aren’t subtracted from the damage award. What can matter is whether the employer would have continued certain pension contributions or benefits during the notice, which may be reflected in the overall damages as part of the lost benefits, but the actual pension payments you’ll receive in retirement aren’t used to shrink theamount of damages for the notice period. The other statements either overstate or misstate the relationship between pensions and damages, or rely on age as a criterion, which isn’t the controlling rule.