England and Pensioners

Since Harper loves England, it may only be a matter of time if this problem or something like it occurs here in Canada. The issue is forced retirement at 65 and the problems of needing to work longer to get a pension. Someday soon:


It was only in October last year that the government finally got rid of the “default retirement age”, where employers could fire older workers at will. However, in light of a recent court ruling, it appears that the debate about forced retirement of older workers isn’t over yet.


What’s new is the basis for the forced retirement. On a case that got its judgment this Wednesday, the court found it acceptable to force retirement of older workers to make way for young, up-and-coming workers to climb the career ladder.


In the case, the firm Clarkson, Wright & Jakes wanted to retire worker Mr Seldon, aged 65. It was allowed on the grounds of opening new doors for young people, but the ruling is worrying many older workers. With increased State Pension age, granny-tax grabs and falling annuity rates, workers of the older generation worry about their pensions not being enough, and many must work longer in order to avoid retiring in poverty.


“Public Interest” Necessary
Another way to boost income in retirement is to take out a stakeholder pension, offered by providers like Virgin Money, or other supplementary personal pension.


The ruling came from the supreme court, and it made clear companies wanting to retire older workers must have public interest at heart, meaning opening up positions for younger people.


Legal experts claim it’s an unusual ruling and the first time the “public interest” defence has been applied to age discrimination laws. Cynics already claim that it is little more than a convenient excuse to get around the governments ban on default retirement age, and allows companies to get rid of older workers and hiring new young ones they can pay less. Many older workers count on working a few extra years past their retirement age in order to have a decent income in retirement, and for them this came as a devastating blow.

Conflicting Rulings
The news about the ruling in the CWJ case came at the same time as the Supreme Court made a separate ruling on the issue of age discrimination. It ruled that it may be ageist for companies to try and hire and promote graduates only, since it can be discriminating towards older workers with no degrees.


The CWJ case is already bound to go back to the employment tribunal, on the basis that it was not entirely shown that retiring workers aged 65 is the best way to achieve the goal of bringing younger people into the workforce and into high positions.

Why we will no longer retire early (Part 2)

The point isn’t about how well our retirees are currently doing but rather about how this is about to change. There are basically three factors that explain why older workers have been able to retire early and relatively comfortably. 

First, they built up substantial wealth as homeowners as house prices soared 500% or more in the past 30 years compared with a rise in inflation of just 154%. 

Second, financial assets have enjoyed a good run, the financial crisis notwithstanding, as the median pension fund returned 9.1% (before fees) over the 25-year period ending December 2009.

Third, and most significant, the labour force grew rapidly in the period from 1960 to 2000 because of two phenomena. First, the female participation rate in the workforce doubled from 33% to 67%. Second, the baby boomers entered the workforce. What does this have to do with retirement age? The labour supply grew much faster than the job market, which caused the unemployment rate to rise from an average of 4.2% in the 1950s to 9.6% in the 1990s. Governments, employers and big labour were all anxious to help older workers leave the workforce a little earlier to ease the pressure on the job market, and they all did their part to facilitate early retirement.

All three of these factors are now starting to work against us. First, we may or may not be in the midst of a housing bubble, but even if it isn’t a bubble, there are many reasons why housing prices will climb much more slowly in the future. The net result will be less housing wealth for future retirees. Second, actuaries are all in agreement that future returns in the capital markets will be lower than they were in the past 25 years. This is more than a guess. Bonds have just completed a 30-year rise as interest rates fell from 18% to under 3%, a slide that produced real returns (after inflation) of nearly 9% per annum. This can’t repeat; in past periods that started with low bond yields, we have often seen negative real returns over the subsequent 30 years.

Finally, the demographics are changing. The large surplus in our labour force is diminishing quickly as the female participation rate is levelling off and the baby boomers are starting to exit. This has caused the average unemployment rate in the 2000s to drop to just 7%, versus 9.6% in the 1990s. Once the unemployment rate gets back down to the 5% level—probably in the next decade—we will have just one large pool of potential workers to draw from: people in their 60s who thought they were about to retire.

If the economy needs workers badly enough, it will find ways to keep them working longer—through either incentives for staying or penalties for retiring early. This is more than conjecture. The recent change in the actuarial factors under the Canada/Quebec Pension Plan reflects this new reality, with a bigger reduction for early retirement and a greater increase for postponed retirement. OAS at 67, of course, is another example. The migration from DB to DC pension plans also results in later retirement. We can expect more measures from governments and employers to encourage later retirement (or discourage early retirement) as the unemployment rate continues to fall. The ultimate result is that Canadians will retire later.

Fred Vettese is chief actuary of Morneau Shepell.

Source: www.benefitscanada.com

Why we will no longer retire early Part One

The following article was prepared by  Fred Vettese and published on  April 11, 2012, in the article he talks about why Canadians not already retired will have to wait longer. So as we move into the fall and closer to Labour Day, I thought it would be interesting to see how much working Canadians have to lose. By the way the forces he talks about are at work in most countries of the world, so the pressure to raise retirement age and reduce retirement benefits to keep people working longer is a world issue, not just a Canadian one.

By 2029, Old Age Security (OAS) will not become payable until age 67. After nearly half a century of improvements in government retirement programs, this is the first significant take-away. And it may not be the last.

For the last four decades, demographics and capital markets have worked in our favour, enabling us to enjoy ever-longer periods of retirement. But that era is coming to an end, and the change to the OAS retirement age is not the cause—it is a symptom.

There is a common misconception that we are in the midst of a retirement crisis. Certainly, this seems like a logical conclusion, given the low pension plan coverage in the private sector (now down to only 22% of workers being covered, according to data from Statistics Canada) and the vast amounts of RRSP contribution room that go unused. Nevertheless, our seniors are doing better financially than the working-age population. Using the low-income cut-off (LICO) as our measure of poverty, only 5.2% of seniors are below the LICO compared with 10.5% of people ages 18 to 64. That doesn’t even take into account the fact that we spend more than $30,000 a year on healthcare for each person age 75 and over, compared with roughly $4,000, on average, for everyone else.

Berries are good for you!

Live Better, Longer

April 26, 2012 -- Eating berries at least once a week may protect the brain from age-related memory loss, a large new study shows.

The study included more than 16,000 women who are taking part in the Nurses' Health Study.

Researchers have been keeping tabs on the women's diets since 1980. Between 1995 and 2001, researchers also measured the mental function of women who were over 70 and had not had a stroke.

Mental functioning was measured during three telephone interviews that were spaced about two years apart. In the interviews, researchers asked the women to recall details from a paragraph they'd just heard, for example, or to remember the order of words or numbers in a list.

When researchers compared women who ate the most blueberries and strawberries to those who ate the fewest, they found that those who ate the most had a slower rate of developing memory problems. The difference was equal to about two-and-a-half years of aging.

"This is pretty compelling evidence to suggest that berries do appear to have memory benefits," says researcher Elizabeth E. Devore, ScD, instructor in medicine at Brigham and Women's Hospital in Boston.

What may be even better news is that the biggest berry eaters in the study weren't eating mounds of them every day. On average, they were eating a single half-cup serving of blueberries or two half-cup servings of strawberries each week.

"These are simple interventions that appear to have pretty healthful effects," Devore says.

The study can't prove that berries protected the women's brains directly For the full post go to:  Source: http://www.webmd.com/healthy-aging/news/20120426/berries-may-slow-memory-loss