Canadians’ retirement age is being pushed back, but 65 is still the critical legal threshold
While Statistics Canada has found an increase in Canadians working past age 65, employer-provided benefits do not seem to be adjusting to this trend.
Citing a recent survey by human resources consultancy Aon Hewitt, the Globe and Mail reports that among 170 Canadian employers, only 30% had a formal benefits policy for older workers. Less than 10% are adjusting their benefit plans for employees over 65, and only 16% offer long-term disability insurance to workers older than 65.
One factor allowing this is a lack of protective legislation. “[W]hen the legislature prohibited mandatory retirement in 2006, subsection 25(2.1) [of the Ontario Human Rights Code] was also enacted, allowing employers to reduce or cut the benefits of employees aged 65 and over,” explained Ontario Human Rights Chief Commissioner Renu Mandhane.
The Ontario Employment Standards Act, which prohibits age-based discrimination among employers providing benefits, does not protect those over the age of 65. Legislation on employee benefits is relatively consistent across provinces and territories: employees over that age may not get coverage even if younger employees in identical roles do.
At the same time, employers are increasingly keen to hire workers over 65. “[T]he generation that’s coming into the work force is not as significant [in numbers] as it was when boomers were growing up, so there’s a gap in resources and abilities,” according to Anthony Perlman, Aon Hewitt Canada’s senior vice president and national practice leader for health and benefits.
Insurance providers, Aon Hewitt included, are starting to offer plans with coverage up to age 70. “My belief is that we’re going to see changes over the next 12 to 24 months in and around our sector,” Perlman said.
The question is whether employers are able to extend those benefits to their employees. “One of the challenges that employers have been faced with over the last several years is the rising cost of drugs,” said Karen Voin, the assistant vice-president of group benefits and anti-fraud for the Canadian Life and Health Insurance Association.
She said that Canadian small and medium-sized businesses, which have 90% of the country’s workers on their payrolls, cannot afford to cover employees past 65. “[T]hey need to look at what’s going to be best to allow them to sustain a benefit program for a majority of their employees,” Voin said.
Last year, lawyer Jamie Melnick represented a teacher in a case against the school that employed him. The teacher has had his benefits cut off since he turned 65, and when the school board argued that extending benefits past that age is cost-prohibitive, Melnick begged to disagree.
“No disrespect to anyone’s opinion, but I think that’s just apocalyptic demography,” he said to the Ontario Human Rights Tribunal, the body who heard the case. “There are no empirical studies that bear that out, and no evidence was put before our tribunal that actually shows that.”
Related stories:
Aging Canadian workforce poses challenges to health and safety programs
Cut-off age for long-term disability benefits should remain the same, says industry expert
Citing a recent survey by human resources consultancy Aon Hewitt, the Globe and Mail reports that among 170 Canadian employers, only 30% had a formal benefits policy for older workers. Less than 10% are adjusting their benefit plans for employees over 65, and only 16% offer long-term disability insurance to workers older than 65.
One factor allowing this is a lack of protective legislation. “[W]hen the legislature prohibited mandatory retirement in 2006, subsection 25(2.1) [of the Ontario Human Rights Code] was also enacted, allowing employers to reduce or cut the benefits of employees aged 65 and over,” explained Ontario Human Rights Chief Commissioner Renu Mandhane.
The Ontario Employment Standards Act, which prohibits age-based discrimination among employers providing benefits, does not protect those over the age of 65. Legislation on employee benefits is relatively consistent across provinces and territories: employees over that age may not get coverage even if younger employees in identical roles do.
At the same time, employers are increasingly keen to hire workers over 65. “[T]he generation that’s coming into the work force is not as significant [in numbers] as it was when boomers were growing up, so there’s a gap in resources and abilities,” according to Anthony Perlman, Aon Hewitt Canada’s senior vice president and national practice leader for health and benefits.
Insurance providers, Aon Hewitt included, are starting to offer plans with coverage up to age 70. “My belief is that we’re going to see changes over the next 12 to 24 months in and around our sector,” Perlman said.
The question is whether employers are able to extend those benefits to their employees. “One of the challenges that employers have been faced with over the last several years is the rising cost of drugs,” said Karen Voin, the assistant vice-president of group benefits and anti-fraud for the Canadian Life and Health Insurance Association.
She said that Canadian small and medium-sized businesses, which have 90% of the country’s workers on their payrolls, cannot afford to cover employees past 65. “[T]hey need to look at what’s going to be best to allow them to sustain a benefit program for a majority of their employees,” Voin said.
Last year, lawyer Jamie Melnick represented a teacher in a case against the school that employed him. The teacher has had his benefits cut off since he turned 65, and when the school board argued that extending benefits past that age is cost-prohibitive, Melnick begged to disagree.
“No disrespect to anyone’s opinion, but I think that’s just apocalyptic demography,” he said to the Ontario Human Rights Tribunal, the body who heard the case. “There are no empirical studies that bear that out, and no evidence was put before our tribunal that actually shows that.”
Related stories:
Aging Canadian workforce poses challenges to health and safety programs
Cut-off age for long-term disability benefits should remain the same, says industry expert
