Can WE afford for YOU to retire?

Perhaps you have heard that the world is getting older. To give you some ideas of what that statement may mean, you should know that in the United States in 1900 the average life expectancy was 47 years, today it is closer to 78. In addition, in the US today, there is estimated to be more than 70,000 centenarians (people 100 and older) and that number will rise to about a million in 2050.

What's more, not only are people living longer but lifestyles have improved as well. For example, there has been a 60 per cent drop in deaths from cardiovascular disease in the US since 1950 and a significant decrease in disabilities.

In addition to these factors, on the other end of the aging spectrum, fertility rates are declining. This means that there are fewer and fewer children being born and, with fewer people being born, there are fewer bodies available to enter the workforce.

The difference between those capable of working and those who are not participating in work is statistically reflected in what's called a dependency ratio.

By way of example of what a dependency ratio measures, in New York in 1999 there were eight million people; five million of these people were workers aged 20-70. Three million of these people were considered dependents, which meant that five million workers had to produce enough for eight million people to live on.

In Bermuda, the total dependency ratio does not look too much different. In fact, according to the 2000 Census, Bermuda's elderly in 2000 accounted for 11 per cent of the population.

This population outpaced the other cohorts with a surge of 25 per cent since the last census. In contrast to the surge of the elderly population, Bermuda has also been experiencing declining fertility levels since the 1970s.

This means that Bermudian women are not having a significant amount of children to replace themselves. According to the 2000 Census, in Bermuda the burden of supporting the dependent segments of our community, i.e. children and the elderly, has increased to 43 dependants for every 100 working persons.

In other parts of the world the burden of the dependent population is just as evident. In fact, the OECD estimates that by 2040, the rise in the ratio of dependent old to working young may reduce Japan's growth in living standards by three-quarters of a percentage point and Europe's and America's by half a point (The Economist, September 4, 1999).

Do these statistics sound startling to you? Well, perhaps they should as most of us will be affected by the ramifications of what's being called "a demographic asteroid headed directly towards the Earth" (The Pfizer Journal).

In Bermuda, the future ramifications of a growing aging population could include:

a) A significant burden on the coffers of the Social Insurance Department and other social services as there will be more people claiming for benefits than persons contributing.

b) A lack of bodies to actually care for and provide services for the elderly because there are fewer workers being born.

c) A weaker economy because a large percentage of people will presumably be on fixed incomes. Given this information perhaps now you can see why my column today is entitled: "Can WE afford for YOU to retire?"

Here are some interesting facts from the CED, The US Policy Committee for Economic Development, that confirm the need for us to find the answer to this question.

1. Americans (and Bermudians, too, I am sure) are retiring earlier and living longer, healthier lives. As a result, they spend more time in retirement than ever before. In 1965, a typical male worker could expect to spend 13 years in retirement; today, he will spend 18 years. For working women, the retirement span has increased from 16 years to more than 20.

2. The workforce is aging. The disproportion between the retired baby boomers and the workers supporting them will be unprecedented. In 1950, there were seven working age persons for every person age 65 and older in the US; by 2030, there will be fewer than three.

3. These two trends have tremendous economic implications. In coming decades, employers will face tight labour markets as fewer new workers enter the labour force. Economic growth will be reduced by lower national savings, due in particular to the exploding cost of old-age entitlement programmes.

It is because of these trends that retirement is no longer considered the relatively short period between the end of an individual's occupation and death - but is instead becoming the longest stage of life for many of us. Therefore, given that we are living healthier longer, today's retiree will find him/herself retiring with many years of potential working life remaining. As such, it is more than likely, that continuing to work past 65 years of age will not only become more and more likely, it will also become more and more necessary.

Yes, the truth of the matter is that for the older worker, early retirement will become more and more of a fallacy than a reality. And, as a result society will have to adapt a whole new way of thinking about work and getting older. All of us who are to be affected by the aging of our population will have to make a few adjustments to our concepts of work by bearing in mind the following steps forward:

a) Workers will have to be encouraged to work longer in order to facilitate longer working lives and to alleviate economic burden. Workers must also be willing to re-train and/or be re-positioned in order to meet the needs of the ever-changing market place.

b) Employers will have to implement adequate and ongoing training of their older staff members in addition to practising age equity in hiring practices.

c) Policy-makers will have to delay the benefits of social insurance and increase the mandatory retirement age in order to control the potential spiralling costs of maintaining an unemployed and/or under-employed workforce.

d) In addition, policy-makers will have to implement and enforce anti-age discrimination laws that protect the older worker's interest in the workplace. Now that's the bad news. The good news is that unions have a potentially large role to play in the education and empowerment of the soon-to-be-retired and the retired workers' life.

For example, younger employees need to know today about the challenges that await them once they reach retirement age. They need to know that chances are they will have longer working lives than their parents did. They need to know that the cost of living will be much higher for them as a retired person then as a working person. They need to know that traditional retirement years will, in all likelihood, encompass one third of their entire lives. They need to know that personal financial planning for old age must begin today. And, finally, younger workers need to know that once work has been completed they must ensure that their rights as workers remain protected, especially as they retire.

In Bermuda, these rights include:

1) The right to have access to a pension post-retirement as mandated by the National Pension Scheme 2000,

2) The right to a Social Insurance benefit post-retirement according to the pension Act of 1970.

3) The right to access to the basic healthcare plan, HIP, once private insurance is no longer available. 4) The right to subsidised hospital benefits after the age of 65.

Employees also need to know the responsibilities required to ensure these rights are protected. These responsibilities include:

1) The responsibility of every employee to ensure that their employer is contributing to the National Pension Scheme and the Social Insurance Plan on their behalf.

2) The responsibility of every employee to ensure that he/she will have access to some form of healthcare coverage past the age of 65 years.

3) The responsibility of every employee to build a personal savings retirement fund.

4) The responsibility of every employee to seek opportunities of continuous learning in order to enhance their contribution to the workplace even as they age.

Indeed, contrary to popular belief, aging in the workplace need not be a scary thing, particularly if society and individuals are adequately prepared for it. In the meantime, however, in order to prepare in Bermuda, there remains work to be done. As a country and as individuals, we must begin to prepare ourselves for what surely appears to be the inevitable.

Therefore as Bermuda's workforce ages, it is imperative that we:

Explore innovative ways to reorganise work for long-tenure employees.

Consider alternatives to retirement such as phased-retirement or flexi-time.

Create better opportunities for older job seekers.

And finally, that we begin to create the public and private infrastructure that will not only support but also promote the inclusion of the older worker in the workplace.

NOW that you have a better picture of the future, I'll ask the question again: Can WE afford for YOU to retire? Well, the answer to that question can be good or bad depending on how you look at it.

Perhaps the bad news is that we cannot afford for everyone to retire at 65. But, the good news is that if we plan now all of us can enjoy fulfilling older working lives as individuals, while the country enjoys a qualified, experienced and contributing workforce of all ages.

And here's how you can help to make the transition a reality. I understand here at the BPSU, there is a Retired Workers Committee. If it is not happening already, perhaps it is these individuals who can begin to embark on an education programme for the younger workers on the realities of retirement in the changing marketplace.

In addition, it might be a good idea to formulate an advocacy wing of this committee that addresses the policy concerns of the older worker. These concerns include the distribution of health and social insurance benefits, the elimination of the practice of mandatory retirement and the eradication of age discrimination in the workplace.

For it is certain, that the 'aging crisis' will only become a crisis if we let it to happen that way. Therefore, as members of a union I encourage you to be proactive in your endeavours as they pertain to these matters.

In closing, and as a means of motivation towards this end, I would like to leave you with the words of Margaret Kuhn, the 70-year-old activist who started the Gray Panthers movement: "We can no longer afford to scrap pile people. Old age is not a disease - it is strength and survivorship, over all kinds of vicissitudes and disappointments, trials and illnesses. Power should not be concentrated in the hands of so few, and powerlessness in the hands of so many. There must be a goal at every stage of life. There must be a goal."

Today, I encourage all of you, whether you have retired already or whether you are anticipating retirement in the future, to set the goal of a 'realistic', affordable and enjoyable old age.

Many thanks for your kind attention and may God bless and keep you all.

Claudette Fleming is Executive Director of Age Concern. E-mail: ageconcernnorthrock.bm