BUSINESS

WHAT’S THE MAGIC IN 65?

We live longer, and stay healthier longer. Shouldn’t we now work longer, too?

COLIN CAMPBELL February 5 2007
BUSINESS

WHAT’S THE MAGIC IN 65?

We live longer, and stay healthier longer. Shouldn’t we now work longer, too?

COLIN CAMPBELL February 5 2007

WHAT’S THE MAGIC IN 65?

We live longer, and stay healthier longer. Shouldn’t we now work longer, too?

BUSINESS

RETIREMENT SPECIAL

BY COLIN CAMPBELL • It’s been 3V2 years since George Vilven lost his job as an Air Canada pilot. He wasn’t fired or laid off, but perhaps even more ignominiously, he was forced into retirement at the not-so-ripe age of 60. Since then, Vilven, who used to fly Airbus 340s to cities like Hong Kong and Sydney, Australia, has been fighting his former employer, arguing that the company’s mandatory retirement policy amounts to age discrimination. Vilven’s case, along with that of another Air Canada pilot, Neil Kelly, is being heard this week by the Canadian Human Rights Tribunal. The two men have the support of about 70 other Air Canada pilots who’ve formed a group, led by 57-year-old captain Raymond Hall, called Fly Past 60. Hall plans to retire at 60, as a good many Canadians do, but decided to back Vilven

against his employer and his own union on principle. “It’s just not right,” he says.

The prospect of an elderly pilot with cataracts and shaky hands in the cockpit of a four-engine, 300-passenger commercial jet is a bit unsettling, and the Air Canada Pilots Association argues that retirement at 60 is “necessary on both safety and operational grounds.” But the pilots say an age cap isn’t needed, given the proficiency requirements and routine tests required of them every six months. “I can say unequivocally that I was a much, much better pilot when I left than when I arrived,” says Vilven, from his home in Airdrie, Alta. “These young guys may have better hands and feet, but the bigger part of the equation is experience.” And yet some of the most trained, best qualified workers will be forced from the cockpit at the height of their careers, says Hall. “It’s a tremendous loss of human capital.”

Airline pilots are by no means alone in their fight against mandatory retirement. Similar battles have been waged in other professions, most notably in academia, where

university professors have been at the forefront of the fight against mandatory retirement. The idea of work ending at 60 or 65 is under attack everywhere by the same generation— the baby boomers (those born between 1946 and 1964)—that drove so much social change in its younger days. As this very influential group nears retirement (the oldest boomers will begin turning 65 in 201l), it’s changing perceptions about aging, and raising questions about what is a realistic age to retire at in a time of swelling life expectancy. People are living longer and healthier and so want to work longer, too.

That push is beginning to be recognized by governments around the world, what with the number of people over the age of 65 expected to double over the next 30 years or so. (In Canada it will jump from four million to 10 million by 2050.) Many Canadian provinces have already banned mandatory retirement, including Manitoba, Alberta, Quebec and, just last December, Ontario. Similar legislation is expected in British Columbia this spring. Canada’s Association for the Fifty-Plus (formerly the Canadian Association of Retired Persons) is now planning a court challenge against mandatory retirement in federally regulated industries. Elsewhere, Britain introduced a plan last spring to gradually raise the retirement age to 68. The United States is pushing up the age at which people can receive full social security pension benefits toward 67, to handle the mass of soon-to-be pension-sucking boomers.

So why 65 in the first place? The notion of retiring at 65 is a relatively modern invention, often credited to Germany’s right-wing chancellor Otto von Bismarck in the late 19th century. Facing pressure from the left for social change, Bismarck needed a quick and popular campaign promise. So in 1889, he introduced an old-age social insurance program (originally for those 70 and over but later lowered to 65). It was a cheap concession-very few in that day and age lived to see 65, let alone 70. The idea spread to other countries soon after, and governments and actuaries across the Western world evaluating pension plans settled on 65 as the ideal age for retirement. “It’s a number workers found attractive, and the financing of the systems, when we didn’t have the life expectancy we do today, was quite affordable,” says Robert Brown, a professor of actuarial science at the University of Waterloo.

Life expectancies have changed dramatically over the past half-century. In 1951, the figure was 67 for Canadian men and 72 for women, leaving retirees precious little time

to hit the beaches of Florida (and to draw pensions) before the grim reaper came knocking. Today, life expectancies in Canada are 79 for men and 83 for women. Even if people aren’t working beyond 65, they’re more capable than ever of doing it. “We’re living longer and generally living longer free of disability,” says Andrew Wister, a professor of gerontology at Simon Fraser University. “There’s no reason why we can’t increase mandatory retirement to 67 or 69—no reason at all.” In fact, numerous studies suggest that those who do work longer are healthier than people who retire early. Many people also need to work longer for financial reasons as life expectancy grows, says Judy Cutler, a director with Canada’s Association for the Fifty-Plus. Wister actually says mandatory retirement should be done away with altogether, so long as people still have the option of retiring with social security benefits at 60. That option doesn’t appear to be in any danger of disappearing. Actuaries say Canada’s pension plan is adequately prepared for the influx of healthy, retired boomers thanks to an overhaul in the 1990s.

Curiously, despite the push to rethink 65, few even work to that age. In fact, over the past few decades, people have been retiring

earlier than ever (although that trend began reversing in the past few years). That reality has also tempered public policy argu-

Otto von Bismarck is credited with the idea of retiring at 65. Much has changed since those times.

ments about any immediate need to push the retirement age past 65. “We’ve got a lot of room to delay retirement without having to push the age 65 but-

ton,” says Brown. “Delayed retirement is probably good public policy, but I don’t think we have to talk to any-

body about working to age 70.”

In Vilven’s case, he continued to fly after his retirement, for a smaller private airline. (There’s no age restriction on a pilot’s licence.) He only stopped flying recently to focus fulltime on his human rights challenge. And there’s reason to believe he’ll be successful when the decision comes out this summer. The push to change Air Canada’s policy is in line with trends in the international aviation community to raise the retirement age. In the short term, this might not bode well for younger Air Canada pilots anxious to fill jobs that only become available when older workers retire. On the other hand, if the kinds of worker shortages anticipated by changing demographics emerge in the not-too-distant future, companies may soon be begging employees like Vilven to work to 65 and well beyond. M