Introduction
CUPE members believe all workers have a fundamental right to retire with dignity and financial security. We are proud of the work we have done to achieve that end.
Our continuing work to secure retirement has involved a political action demanding from governments adequate public pension plans such as the Canada Pension Plan and Quebec Pension Plan. We have also used our collective bargaining strength to secure decent workplace pension plans from our employers. This difficult work has been a long-term project, and we know full well it is far from completion. With only 40% of workers covered by a workplace pension plan, and large numbers of workers (particularly single women) continuing to retire into poverty, we still have a long way to go.
Recent Attacks on Pensions
Unfortunately, recent years have seen a ferocious counter-attack from employers and governments intent on stripping away what gains we have made. The Canada Pension Plan (CPP) saw its first-ever significant benefit cuts in 1998, and the federal government threatened to raise the retirement age to 70. In the 1996 federal budget, then-finance minister Paul Martin announced that the near-universal Old Age Security (OAS) program would be replaced with an income-tested welfare scheme only to back down two years later in the face of massive public opposition.
Employers are responding to the recent downturn in financial markets with an unprecedented attack on long-established benefits under our workplace pension plans. Many of our pension plans have recently fallen into an underfunded position due primarily to a combination of weak investment performance and low interest rates.
A recent study reported that 39 of the largest 49 corporate pension plans were underfunded, with deficiencies totaling some $14 billion. The situation is equally dire in the public sector. Employers are responding by trying to roll back existing provisions for indexing, for early retirement, and disability pensions. Some employers are even trying to eliminate their pension plans altogether, aiming to replace them with inferior, risky, insecure RRSPs.
Mandatory retirement is being presented as a solution
The Ontario Liberal government announced that it will end mandatory retirement and are beginning a process to implement that change. The government claims that older Ontarians want to continue paid employment and that recent immigrants and women workers need to work longer as they are not able to reach financial security by age 65. Support for banning mandatory retirement is also coming from those who are already financially secure and work in non-physically demanding jobs. The governments solution is to give people the choice about when to retire.
The reality is that ending mandatory retirement does not give workers genuine freedom to choose to work longer. Making it possible for workers to work longer because that is the only way they can survive does nothing to expand workers options when it comes to retirement. On the contrary, eliminating mandatory retirement will mean that workers without adequate pension coverage (including vast numbers of women and immigrants) will never have the option of retiring.
Another reality is that the work most CUPE members do is physically demanding, mentally stressful and often in unhealthy and unsafe workplaces. Older workers do not want work that requires heavy lifting or work that requires them to work long shifts in high-pressure situations. Working more years in those conditions is no substitute for the quality of life they would have with an adequate retirement income. There is no evidence of large numbers of workers wanting to work longer.
Should mandatory retirement be ended, the next step by governments will be to raise the normal retirement age. With each year of delayed retirement beyond the established normal age of retirement, billions of dollars in pension costs and liabilities will be eliminated for both governments and employers. The United States has already amended their Social Security to phase in a retirement age of 67. Age 70 retirement as recently contemplated on the list of possible CPP cuts will then become the target.
Further, eliminating mandatory retirement and increasing the age of retirement will mean fewer job opportunities for todays unemployed young workers. There will no longer be pressure on governments and employers to train and recruit young workers.
Mandatory retirement does not guarantee that workers get an adequate retirement income. However, without mandatory retirement governments and employers will always look to us to work longer as an alternative to providing adequate pension plans. It is CUPEs position that the individual right of a worker to not retire would diminish the rights of the vast majority of our members to a timely, financially-secure retirement. Our position is based on the same principles that apply when we enforce rules relating to hours of work, such as overtime. Also, it is important to remember that mandatory retirement provisions do not mean that people are forbidden to work beyond a certain age. Mandatory retirement provisions only apply to a specific work place or pension plan.
Mandatory Retirement is the wrong issue
Employers and governments are focusing on the issue of mandatory retirement but for workers it is the wrong issue. The vast majority of CUPE members would prefer to retire earlier not later. CUPE members want choice when it comes to deciding their retirement age, but real choice will only exist if we have a strong and comprehensive retirement system; a comprehensive approach to the training and recruitment of young workers; and protections against dismissals based on age. Therefore, in response to demands for the elimination of mandatory retirement, CUPE calls instead for:
- increases to provincial low-income supplements, sufficient to eliminate poverty in retirement;
- the requirement that all large employers provide secure defined benefit pension plans to all employees including part-time employees;
- establishing full indexation and improved survivor benefits as a requirement of provincial pension law;
- improving the recognition of international education and employment credentials so that immigrant workers can more easily obtain employment;
- amendment of all employment standards legislation to require just cause for any dismissal;
- the full commitment of all governments to the principles of decent minimum labour standards and pay equity to ensure that retirement income (which is based on earnings) is adequate.