“It is most definitely an ongoing trend, and it is something we are worried about because if you look at employee pensions as deferred wages, well that’s part of a contract between them and their employer. To unilaterally change those benefits retroactively after the employees have fulfilled their part of the contract is, we feel, unfair and unwarranted and should probably be illegal.” Susan Eng

By John Devine

This article was published by ARIA. To see this article and other related articles on their website, click here.

Governments should have learned a number of truths about seniors. They are engaged, have insight and knowledge gained from a lifetime of experiences, and know how to come out swinging when their interests are challenged.

Yet, says Susan Eng, CARP’s vice-president of advocacy, some politicians seem to have forgotten the lessons of time when it comes to challenging seniors over what they hold dear, particularly retirement income.

Writing in the Huffington Post, Eng said there is a move to start a war on seniors, with lines of battle being drawn around issues of so-called generational fairness click here for an ARIA story on that and the provision of government income supports to a group of Canadians who, supposedly, don’t need them.

In a recent conversation with ARIA, Eng challenged such observations and discussed how seniors are mobilizing to not only protect their interests, but also those of younger Canadians.

“Seniors are able to provide life experiences to fight for things that can only benefit those who come after them. When we are talking about pensions or changes to healthcare, most often it’s going to take a long time and won’t happen overnight,” she relates.

A case in point, continues Eng, is the change to Old Age Security (OAS) eligibility, which the federal government has upped from 65 to 67. However, the shift isn’t slated to kick in until 2023, with the full impact not being felt until 2029. Despite not impacting them, seniors and groups advocating for them, including CARP, are working to have the policy reversed.

“You are talking about a group of people who remain altruistic and who have life experiences and a willingness to get out and vote”, says Eng. Trying to set up an intergenerational war is misguided.

It’s true that as a group today’s seniors have retirement wealth, but that’s because they have spent a lifetime accumulating it, says Eng. But it’s also true that more than 300,000 Canadians over the age of 65 live in poverty, a number that’s increasing according to a recent OECD report which reveals that poverty rates rose in Canada between 2007 and 2010, while falling in most OECD countries.

The provision of adequate retirement income is key to keeping seniors out of poverty and off government programs like the Guaranteed Income Supplement (GIS), Eng and other pension/retirement experts maintain. They have the numbers and analysis to back them up.  2013 report by the Boston Consulting Group shows the value of retirement income derived from defined benefit plans, not only for retirees but also for local economies that benefit from spending by retirees on goods and services.

The report also shows the value of adequate retirement income in keeping seniors off tax-funded programs like the GIS “ only 10-15 per cent of retirees with DB income get the GIS, while 45-50 per cent of seniors without that income receive the GIS.

Defined benefit plans have reacted to risks such as longevity by changing the terms for working members, including higher contributions and retirement dates. Now, some jurisdictions are unilaterally changing the terms for retired members, a trend raising the ire of those members and the groups representing them, and understandably so, says Eng.
A group of retired public servants in New Brunswick would certainly agree. Their group Pension Coalition NB is taking the government to court over unilateral changes to their pensions, including making the provision of cost-of-living-allowances conditional on market conditions. (Click here for an ARIA interview with Clifford Kennedy of the coalition).

Eng wonders if the defeat of the previous New Brunswick government, which had brought in a shared risk model and the unilateral changes opposed by the coalition, had something to do with grey power as angry retirees took their opposition to the ballot box.

Another group of retired civil servants, this one representing former federal employees, are challenging a pension proposal they say will strip away existing benefits “ the federal government’s proposed target benefit plan for federally regulated industries. (Click here for an ARIA interview with leaders of this group).

It is most definitely an ongoing trend, and it is something we are worried about because if you look at employee pensions as deferred wages, well that’s part of a contract between them and their employer. To unilaterally change those benefits retroactively after the employees have fulfilled their part of the contract is, we feel, unfair and unwarranted and should probably be illegal.

When she considers the retirement landscape and where Canada is on dealing with issues of inadequate retirement income, Eng sees ongoing concerns but is largely optimistic progress is being made, mostly because Canadians, and not just retirees, are becoming more engaged.

People are realizing we are all impacted by retirement security. We do have to make a concerted effort to improve the pension situation for all Canadians, and it’s not something you can do on your own.

The fact that people are talking about it makes me optimistic, on balance. Whether or not they are taking enough action is another story. But as long as it’s on the burner, that’s a source of optimism.