Mandatory Retirement’s Future The macro-economic reality is that most employers will soon need to encourage employees to keep working as long as they are able to contribute. Some employers are in that position already. That reality may well spell the end for mandatory retirement. Perhaps coincidentally, both Ontario and Newfoundland & Labrador have decided to join the majority of other provinces and all three territories that have abolished widespread mandatory retirement. Only British Columbia, Saskatchewan, and the federal jurisdiction will still allow mandatory retirement at age 65 without restrictions. New Brunswick will allow it under the terms of a bona fide retirement or pension plan, and so will Nova Scotia, as long as the plan applies to all employees. Ontario will continue to allow mandatory retirement at age 65 until December 12, 2006, and Newfoundland & Labrador will allow it until May 26, 2007. Where mandatory retirement is not allowed, exceptions can be made when there are bona fide and reasonable occupational requirements that make employment beyond a certain age untenable. Usually, these exceptions apply only to strenuous, safety-related jobs such as firefighters, police officers and airline pilots. How Much Difference Will It Make? Interestingly, survey data shows that many workers don’t want to fully retire at age 65. A Human Resources Development Canada study in 2002 showed that more than 20 per cent of workers age 45 and older planned to retire after age 65 or to never retire. Statistics Canada’s 2002 General Social Survey showed that nearly 12 per cent of recent retirees would have stayed at work if not for being forced to retire – about the same percentage of employees who currently continue working past age 65. A further 31 per cent of recent retirees would have stayed in the workforce if they could have worked shorter hours, fewer days, part-time or seasonally, or made other changes in their working conditions. Some would have done their regular work, while others might have liked to do something different, in order to keep busy, feel a sense of accomplishment and supplement their retirement savings. In Hewitt’s Trends in Canadian Retirement Programs, 2004 survey, recent retirees were asked why they retired when they did. By far, the answer given most often was ”I no longer enjoyed my work.“ The other two of the top three responses were early retirement incentives provided by employers, along with the ability to retire early with an unreduced pension. |
