November 2017
Today, people planning to work later into their old-age are more common.
Employers are nervous. They are concerned about employees being less productive and more costly to support as they age.
Retirement savings are not as much as they once were and working later in life is the only way to maintain a consistent standard of living. Working longer is viewed by many as preferable to adjusting their retirement lifestyle to match savings.
A Willis Towers Watson survey of workers and retirement savings shows the number of people planning to work past age 70 has increased from 5% in 2011 to 21% in 2016.
Part of this relates to the growth in defined contribution pension plans which do not guarantee specific retirement pension amounts. Rather, the amount depends on the returns of pension funds that have been invested.
In Canada less than 40% of workers had a pension plan in 2014 (Statistics Canada), a majority of which were defined benefit plans. Employers have found it difficult to keep these plans adequately funded and are replacing them with defined contribution pension plans.
Defined contribution pension plans place less responsibility on employers to fund retirement pensions. Employees have greater responsibility for managing their investments and preparing for retirement.
