IN DEPTH
Aging population
Mandatory retirement fades in Canada
Last Updated: Thursday, August 20, 2009 | 4:11 PM ET
CBC News
Between 2001 and 2006, the number of Canadians aged 55 to 64 jumped 28 per cent. (Jessica Hill/Associated Press) Across much of Canada, mandatory retirement has been given the pink slip.
On July 1, 2009, Nova Scotia became the latest province to enact legislation to amend its human rights code and end the practice. As of that date, workers in the province are no longer forced to quit when they turn 65.
"People choose whether to retire or not for many reasons, based on their own lifestyle, circumstances and priorities. Today, people are living longer and have more active lives," said Graham Steele, who was at the time the acting minister responsible for the Human Rights Act,
"Many want to continue working, as they still have a lot to contribute," he said in a release on June 30.
That was certainly the thinking in other provinces — such as British Columbia, Newfoundland and Labrador, Saskatchewan, and Ontario — when they moved in the past few years to eliminate mandatory retirement.
Limits on age
But there are some limits elsewhere. Many provinces have provisions to allow mandatory retirement for jobs where physical ability is a must, such as firefighting and police work.
In New Brunswick, the Human Rights Act prohibits mandatory retirement, but includes a provision allowing companies to enforce mandatory retirement under "the terms or conditions of any … retirement or pension plan."
On the other hand, if you want to retire at 65, nothing in the legislation will stop you from doing so.
And the Federal Court is now having to deal with one curious wrinkle of its own.
The court had to adjourn two cases on Aug. 18, 2009, after a Toronto lawyer questioned the propriety of having deputy judge Louis Tannenbaum, 77, preside over the cases.
Under the Constitution Act, all superior court judges — including deputies — must retire at 75. In a direct contradiction of that edict, however, the Federal Courts Act allows for any superior, county or district court judge to be appointed as a deputy. There is no mention of any age limits for deputy judges, although the Federal Courts Act says that full-fledged superior court judges must also retire at the age of 75.
That contradiction, which had been in place for over 30 years, had apparently escaped the scrutiny of the legal community.
The Federal Court is expected to rule in September 2009 on whether deputy judges over the age of 75 can work for superior courts — a decision that will likely be closely watched by six of the seven deputy judges in Federal Court who are over the age of 75.
Freedom 65? Not for all
Bankers love the concept of retirement, especially around the run-up to the February RRSP season.
Sure, many people don't like their jobs and want to retire if they can afford it. Just six per cent of workers continue to work full-time after age 65 and the average retirement age in Canada is 62.
Why should that six per cent, opponents of mandatory retirement ask, be forced out of their jobs merely because they have turned 65?
It has been shown that those with the most education tend to enjoy their work and are reluctant to be turfed out. And many people want to keep working for a variety of other reasons, including because they enjoy the office camaraderie, sense of purpose or routine.
Sometimes it's a case of economic survival.
Geography comes into play. If public pensions total, say, $15,000 — the amount can vary widely, depending on extra benefits — it makes considerable difference whether these pensioners live in Vancouver or Portage la Prairie, Man.
Compulsory retirement can also be especially hard on single women, who were (and often still are) paid significantly less than men and may have spent years out of the workforce to raise children.
So many haven't been able to put away as much money as men. And it gets worse down the line, as female life expectancy outpaces that of men by about five years.
Retiring earlier, living longer
In recent years, there has been a sea change in attitudes to public pensions and the very concept of retirement.
When the age of 70 was selected in the early 20th century as the age of eligibility for a government pension, life expectancy was about 60. Now, the population is aging — fast — but Canadians are allowed by government pensions to retire earlier, at 65.
Data taken from the last census shows that the number of Canadians aged 55 to 64 — those most likely to be thinking about retirement —jumped by 28 per cent to 3.7 million between 2001 and 2006
Statistics Canada says the numbers of retirement-aged Canadians in the workforce will continue to increase — in less than 10 years, one in five people in the workforce will be aged 55 to 64.
And the number of workers in Canada for every retired person is expected to fall to two in 2031, from five in the 1980s, as a wave of baby boomers retires from the workforce.
An aging population is putting increased pressure on public pensions. (Nathan Denette/Canadian Press) Because people live so much longer, and retire so much earlier, there will be increased pressure on public pensions. Demands to raise CPP contributions are expected in coming years.
This demographic shift is already making an impact in the United States, where the retirement age has been raised to 67 for those born after 1960 and may be raised again.
Some companies are coping with this workforce shortage by instituting plans such as "retirees on call," which allows retirees to come back on a part-time or casual basis, and "phased retirement," which gradually reduces the number of hours they work.
The meaning of happiness
These plans address the arguments of employers who favour compulsory retirement because it unloads workers who are at the peak of their earnings, allowing the companies in some cases to hire two young workers for the price of one older worker. Yet it allows them to continue to tap into the vital experience, smarts and connections of the older workers.
For years, Larry Folliott worked for IBM Canada Ltd. as a mergers and acquisitions expert. He retired at 57 to become an "IBM retiree on call," which means, he says, that he can "goof off" to Maui for weeks at a time with his wife or play golf with his buddies in South Carolina, but be ready to head back to the office any time IBM needs an extra hand with mergers and acquisitions.
Other companies have encouraged retired CEOs and other senior employees to return with less pay and less authority to coach others.
One man who took advantage of this arrangement said it finally answered for him the question "What is happiness?" "Happiness," he said, "is working at a job you enjoy for which you are vastly overqualified."
