MYTH: Mandatory retirement is necessary to ensure there are jobs for younger workers

THE FACTS: The “jobs for youth myth” is based on two faulty assumptions: that there are only a limited number of jobs available and that there are enough new workers to replace the number of people leaving the workforce.

The “limited number of jobs” assumption is only valid in a stagnant or declining economy. British Columbia is currently in an economic boom and jobs are going unfilled for a lack of qualified workers.

The “enough new workers” assumption only works with a relatively stable population. Canada, however, is experiencing an extended period of low fertility. As a consequence, Statistics Canada is projecting a decline in the traditional working-age population (15 to 64) over the next two decades.

In other jurisdictions, when mandatory retirement was eliminated, the average age of retirement increased by only two to three years.

MYTH: Older workers are less productive than younger workers

THE FACTS: The “productivity myth” is based on the faulty assumption that work is tied to physical strength and endurance. This assumption probably reflected reality more closely 30 years ago, when a large proportion of BC jobs were in the resource extraction and manufacturing sectors. Today, almost 80% of jobs are in the service sector, and the largest rate of job growth is in the “knowledge-intensive” industries. Even to the extent that job productivity relies on healthy workers, today’s seniors are much healthier, live longer, and have more years of disability-free living than did previous generations.

MYTH: Mandatory retirement allows older workers to retire with dignity, rather than be forced out because of poor performance

THE FACTS: The “retire with dignity myth” is based on two faulty assumptions: that older workers will want to continue to work even when they are not adequately performing their duties and that poor work performance is dependent on age. Older workers are no different from other workers. The vast majority of them take pride in their work and want to do their jobs well. It’s shameful to assume that a significant number of older workers will try to hang on to their jobs even though they are performing poorly. It is also important to remember that poor performance is not a problem limited to older workers. Businesses have to deal with poor performing employees of all ages. Employers should have respectful and effective means of dealing with poor performance and apply those means fairly, regardless of age.

MYTH: If we eliminate mandatory retirement then people will be forced to work longer

THE FACTS: The “forced to work myth” is based on the assumption that if mandatory retirement is eliminated then the federal government and pension plan trustees will raise the minimum age of pension eligibility (which is now 60 for the Canada Pension Plan, and can be as low as 50 for other pension plans). The pressure to raise the minimum age of pension eligibility is based on demographics, not on the presence or absence of mandatory retirement. Defined-benefit pension plans are based on certain assumptions about the life expectancy of plan members. If life expectancy increases, the costs go up. To deal with rising costs, the plan trustees have the option of decreasing benefits to retirees, increasing the required contribution from employees and employers, or reducing the number of people eligible for benefits by increasing the minimum age for pension eligibility. For example, in Japan, where mandatory retirement is alive and well, the government plans to deal with its demographic pressures by increasing the minimum age of eligibility for the public pension plan from 60 to 63 in 2007, 64 in 2010, and 65 in 2013. Because individual circumstances vary widely, it’s vital that we keep open options for retirement at a wide-range of ages with adequate pension income. It’s no less discriminatory to cut off pension eligibility to the 55-year-old who wants to retire because of poor health, than it is to force retirement a 65-year-old who is willing and able to work.

MYTH: Mandatory retirement is necessary for employers to plan their staffing needs

THE FACTS: The “planning myth” is based on the faulty assumption that employees spend their whole working life with one employer. While this may have been closer to the truth a few decades ago, today the labour market is dynamic and employees will change their employers a number of times during their working lives. As a result, employers no longer deal with static models of staffing and must deal with employees coming and going for all sorts of reasons, including retirement. The elimination of mandatory retirement will only slightly complicate human resource planning.