Canada: Survey Finds Most Canadians Not Saving Enough for Retirement

Most Canadians are concerned they have not saved enough to sustain them through retirement, according to findings from a Conference Board of Canada report. In "A Survey of Non-retirees and Retirees in Canada: Retirement Perspectives and Plans," 60% of those 55-64 years of age, and a little over 40% of those aged 65+ report that they have not put enough money aside, and these numbers are lower for women and those with lower levels of household income. The Board also has published a companion report—"An Employer's Perspective: Retirement Savings and Preparedness"—examining employers' views on the retirement preparedness of their employees, and retirement savings plans and practices among Canadian organizations.

The effect of this is that over one-third of Canadians say they don't know when they'll be able to retire. In addition, the report finds that the average planned age of retirement was 63.2 years of age. Women (83.5%) were more uncertain than men (69.8%) regarding their planned future retirement, and up to 19% of respondents say they will never retire.

Concern over inadequate retirement savings has already led a good number of Canadians to delay their retirement. More than one in five respondents have decided to retire later than their initial plan five years ago. Furthermore, a full 45.6 per cent of respondents say they plan to continue to work part-time or on a contract basis after their official retirement, and the percentage increases with age. About 51 per cent of those aged 45-64, and 60 per cent of those aged 65+ say they will continue working past their official retirement date.

In the report on the perspective of employers, the Board reports that more than 40% of employers believe their employees are too optimistic in their assessment of when they will be able to retire, and close to 50% feel their employees are unaware of how much savings are needed for retirement.

Source: Conference Board of Canada Press Release (October 27, 2014)

United Kingdom: Prince Charles's Group Issues Report on Older Workers and Unemployment

In the United Kingdom, the Prince’s Initiative for Mature Enterprise (PRIME) and Business In The Community, which are looking at unemployment among the over 50's, have, with the International Longevity Centre, released the first of three reports looking at the economic barriers facing the over 50s. "The missing million: illuminating the employment challenges of the over 50s" reports that, of the 3.3 million economically inactive people aged 50-64, approximately 1 million people have been made "involuntarily workless" (pushed out of their previous job as a result of "shocks," a combination of redundancy, ill health or early retirement), which has created a group of millions of over 50s are not working but would like to and are not receiving the help they need.

In addition, the report finds that helping people aged over 50 are helped back into employment does not mean that younger people are crowded out of the labor market, but rather could lead to a potential £88 billion boost to the UK GDP.

Two further reports are expected to be published following this paper on employment solutions and benefits of maintaining an older workforce.

Sources: International Longevity Centre Press Release (October 23, 2014); PRIIME News Release (October 23, 2014)

Switzerland: OECD Reports Calls for Greater Efforts To Help Older Workers Stay at Work

The OECD has issued a report finding that Switzerland should do more to help older people, especially women, work longer in order to meet the challenge of a rapidly aging population. According to "Working Better with Age in Switzerland," while Switzerland has one of the highest employment rates for older workers in the OECD (in 2012, 70.5% of Swiss aged 55-64 were in work), the rate is much lower for women (61.5%), particularly if they are non-graduates (49%). In addition, the report notes that, once older workers lose their jobs, it is often difficult for them to get back into the labor market: 59% of unemployed Swiss workers aged over 55 had been out of work for more than 12 months in 2012, up from 40% a decade ago and above the OECD average of 47%.

Accordingly, the OECD recommends that Switzerland (in order of priority):

• help women by promoting their employability, make it easier for them to balance work and family life throughout their careers and remove work disincentives in the tax system and the pension system;
• make training more attractive for low-skilled workers and encourage enterprises to keep training them until the end of their careers;
• encourage social partners and pension funds to reduce incentives for early retirement in their second pillar schemes;
• support the action of the Public Employment Service in helping older workers, particularly aged 60-64, find stable jobs;
• improve the targeting of social assistance budgets for the older unemployed to help them back into work;
• encourage social partners to link pay more to experience and performance than age;and
• combat age discrimination (which remains legal in Switzerland, and is quite common.

Source: OECD News Release (October 23, 2014)

New Zealand: Conference Addresses Employment of Older Women

New Zealand's National Advisory Council on the Employment of Women (NACEW) held a conference on "Employment of Older New Zealand Women" at which, among other things, results of research were presented, showing that there's a large number working low-paid and physically demanding shift work. In "The Employment of Older NZ Women", the study commissioned by NACEW, economist Paul Callister suggests that the rates of older women in the workforce, which have shot up from 2% of those aged 65 or more 20 years ago to 15% today, could top 30% in a further 20 years.

Combining the recent trends in education with the projected demographic change shows there is a large ‘bulge’ of mid-life women workers, most of whom are working full time and many of whom are well educated, who are moving towards traditional ages of retirement. Depending on their choices and opportunities in the labour market, in the short term this may lift the employment rates of older women. But in the longer term, this group will continue ageing and will move into age groups where employment rates are very low.

While presenting various data, comparing ages, education, region, and Maori, the paper does not make any specific recommendations. However it does suggest that relatively little is known about the employment of older women, and that one important issue for further research is the relative employment related earnings of older women and men.

At the conference, Traci Houpapa, NAECW chief executive, was quoted as saying that ageism is a major barrier to older women wanting to work: "Age discrimination can also have an impact, reducing the ability of older workers to change careers later in life if issues start to occur, therefore more flexible, sustainable employment is required to enable older workers to stay in the labour force."

According to another report, Minister for Women Louise Upston said the economy was strengthening but, as the employment market tightened, there would be increasing demand from employers for on-job training for staff who did not have formal qualifications.

Sources: TVNZ One News "Concerns raised for ageing female workers" (October 22, 2014); Stuff.co.nz "Working women 65 and older set to double" (October 22, 2014)

Survey Looks at "Generation 2.0" Gap between Younger and Older Employees in the Workplace, and Mentoring Needs

According to a survey conducted by Harris for Ricoh-USA, intergenerational tensions resonate in today's U.S. workplace as many younger workers question older colleagues' competence and many older workers question younger workers' commitment. Referring to this as "Generation 2.0," the survey found that:

• 69% of those surveyed say younger workers are frustrating when it comes to work ethic;
  
• 48% say the younger employees usually have to help older ones at their place of employment use technology; and
  
• when workers are asked to identify which generations make the best mentors, they generally choose their own generation. In fact, those 18-34 (27%) are three times as likely as those ages 35-44 (8%), 45-54 (4%), and 55-64 (5%) to cite Gen Y (also known as Millennials) as the best.

According to Terrie Campbell, Vice President, Strategic Marketing, Ricoh Americas Corporation, "although Generation Gap 2.0 doesn't pervade the culture like the original generation gap did, it's no less a real phenomenon."

"We recommend companies take a hard look at whether their business information is working for employees of every workstyle," said Campbell. "At the same time, companies should configure their mentorship and training programs with generational differences in mind. They need to ensure that older workers have a comfort level with using technology effectively and that younger workers develop the people skills that previous generations have valued. There's a lot for employees to learn from one another."

Source: Ricoh-USA News Release (October 21, 2014)

Related Source:

Germany: Court Rules that Older Workers May Be Given More Vacation Time than Younger Workers

Germany's Federal Labor Court has issued a ruling that allows an employer of older workers to give more vacation days annually than the younger ones, finding that this difference in treatment on grounds of age can, from the viewpoint of protection of older employees in accordance with discrimination law, be permitted. In this case, a shoe manufacturer, decided that work in its production operation was physically tiring, to allot two extra vacation days to employees after 58 years of age, to allow for longer recovery times than younger workers.

According to one report, a court spokesman said that this kind of differentiation would have to be decided on a case-by-case basis, as different types of work placed different strains on workers.

Sources: Federal Labor Court Press Release No. 57/14 (October 21, 2014); The Local "Older workers can have extra days off, court says" (October 21, 2014)

Research: Effect of Early Retirement and Part-time Employment on Participation Rates of Older Workers in Europe

The results of a study analyzing the variation in labor market withdrawal of older workers across 13 European countries over the period 1995-2008 has been published. In "Early retirement across Europe. Does non-standard employment increase participation of older workers?," Jim Been and Olaf Van Vliet sought "to contribute to existing macro-econometric studies by taking non-standard employment into account, by relating the empirical model more explicitly to optional value model theory on retirement decisions and by using a two-step IV-GMM estimator to deal with endogeneity issues."

Their analysis, published as Netspar Discussion Paper No. 10-2014-044 led Been and Van Vliet to the conclusion that part-time employment is negatively related to labor market withdrawal of older men. This relationship is less strong among women. In addition, they found that part-time employment at older ages does not decrease the average actual hours worked. Furthermore, the results show a positive relationship between unemployment among older workers and early retirement similar to previous studies.

As a wider implication, our results suggest that facilitating part-time work might contribute to higher labor market participation among older workers at the extensive margin. However, facilitating part-time employment could also induce a reduction in working hours among persons who would otherwise have remained working in full-time employment. Our analysis suggests that increases in part-time employment did not have negative effects on the labor supply at the intensive margin across countries. For men, the results even suggest clear positive effects. This indicates that part-time work schemes may actually increase the labor supply at both the extensive and the intensive margin at older ages.

Source: Social Science Research Network Abstract (October 15, 2014)