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Between 2001 and 2006, the number of Canadians aged 55 to 64 jumped 28 per cent. ((Jessica Hill/Associated Press))

A year after much of Canada gave mandatory retirement the pink slip, the end of enforced termination is still not much of a factor in small business planning.

That is because, with all the worries that Canadian entrepreneurs have in 2010, figuring out whether that older-than-65 employee remains a top-notch worker is far down the 'to-do' list, experts say.

More than a year ago, Canadian provinces —  except New Brunswick — put the boots to laws that allowed employers to sack workers once they turned 65. Before mandatory retirement rules were changed in Canada, an employer "could go in and say 'you're over 65. Clean out your desk," said Paul Timmins, a senior consultant with the Toronto office of pension experts Towers Watson.

Today small businesses need to find a specific reason to terminate older workers, in contrast with past decades when citing mandatory retirement was sufficient, Timmins said.

"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 the acting minister responsible for the Human Rights Act in Nova Scotia in July 2009.

That month was when that Maritime government essentially scrapped mandatory retirement. "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.

 Regional breakdown of retirement rules

Province or territory Retirement rules
Nunavut No mandatory retirement age.
Northwest Territories No mandatory retirement age.
Yukon No mandatory retirement age.
British Columbia Law to eliminate mandatory retirement took effect Jan. 1, 2008.
Alberta No mandatory retirement age.
Saskatchewan Law to eliminate mandatory retirement took effect November 2007.
Manitoba No mandatory retirement age.
Ontario Law to eliminate mandatory retirement took effect Dec. 12, 2006.
Quebec No mandatory retirement age.
New Brunswick No mandatory retirement, but companies allowed to enforce it under "the terms or conditions of any … retirement or pension plan."
Nova Scotia Law to eliminate mandatory retirement took effect July 1, 2009.
Prince Edward Island No mandatory retirement age.
Newfoundland and Labrador Law to eliminate mandatory retirement took effect May 26, 2007.

And Timmins figures that those workers could be more likely to stay on past retirement age in smaller companies simply because those firms usually often do not have pension plans.

Thus, a longer work-life becomes a financial necessity, he said.

In reality, however, most workers exit the workforce at a younger age, not staying on longer, Timmins said.

"It is so rare that someone wants to stay on until 65," he said, noting that the average quitting age for public servants is slightly more than 60 and about 62 years for private employees.

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.

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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."