The retirement age should be increased to 70 over a ten-year period, a Labour Advisory Committee report recommended yesterday.
The report, tabled in the House of Assembly, said Bermuda’s ageing population had put pressure on pension plans and public sector finances.
It also recommended that legislation should be amended or introduced to prevent discrimination against older employees and that a toolkit to help people prepare for retirement should be created.
An LAC sub-committee compiled the Reviewing the Retirement Age report, which was tabled by David Burt, the Premier.
The sub-committee recommended the creation of a single piece of legislation designed
• Increase the retirement and pensionable age at the same time from 65 to 70 over a ten-year period, with the retirement age to move to 68 inside a five-year period.
• Allow for annual re-employment contracts for five years after the prescribed retirement age.
• Ensure early retirement provisions were in place for workplace pensions and Contributory
Pension Fund payments.
• Ensure employers were not prevented from the retention of older employees for as long as was wanted after the retirement and re-employment periods.
Mr Burt told the House: “There is a need to stabilise pension funds, to allow working men and women the benefit of greater capacity to earn and therefore better prepare for their eventual retirement, and to use the longer life span in the modern era to the benefit of society and the people of Bermuda.”
He said that a review of the mandatory retirement age of 65 for public service workers was a Throne Speech promise.
Mr Burt added that he hoped the report would win cross-party support in the House and the Senate and that the Government could then return with amendments to the Public Service Superannuation Act to introduce some of the recommendations.
The report pointed out that, except for public sector workers, there was no legislation that insisted employees retired at 65.
But Mr Burt said that was “the generally accepted practice” in Bermuda and most people agreed to finish work at that age when they signed employment contracts.
The National Pension Scheme (Occupational Pensions) Act 1998 said that the “normal retirement date” was no more than a year after a pension plan member’s 65th birthday, unless an earlier date was set in the pension scheme.
The sub-committee said the island’s ageing population had created “additional stress to public pension plans and public sector finances”.
The report added: “Many persons who reach the retirement age are financially unprepared for retirement.
“The evidence clearly shows that there is a willingness from persons 65 and over to continue to work. Financial assistance outlays to seniors is extremely high and reinforces the point that a growing portion of our seniors are in dire need of additional financial resources.”
The sub-committee said: “The reality is that if the problem is left unaddressed, the financial stress on individuals, pension plans and the Bermuda Government will grow.”
It added that legislation should be created or amended to prohibit age discrimination in the workplace and to make sure people had equal rights in recruitment, hiring, compensation, benefits, training, work conditions and career development.
Claudette Fleming, the executive director of Age Concern and part of the group behind the report, said the charity was pleased that the Government had given the recommendations serious consideration.
She added: “A variety of industry leaders committed valuable time to consider the issue.
“The matter of the relevancy of the retirement age in our current existence has been left unresolved for many years.”
Ms Fleming said: “Sadly, workplace discrimination based on age was not included in the 2013 amendments to the Human Rights Act.
“We look forward to seeing the extent and boldness to which the current administration will take in extending the opportunity for older adults to work beyond the age of 65 years, should they so choose.”
Craig Cannonier, the One Bermuda Alliance leader supported the proposals.
He said: “By not increasing the retirement age we essentially are not taking advantage of the intellectual capital that exists within that age group.
“The work experience and life experience that they have had lends so greatly to creating effective leadership within companies.
“Whether you’re in a supermarket, international business, whether you work in the public or private sector, it’s vitally important that we take advantage of that.
“I know 65-year-olds who have far more energy than 35-year-olds, so I think it’s a great move.”
• To click on the report, and to read David Burt’s statement in full, click on the PDFs under “Related Media”