In order to avoid the looming skills crisis in Canada, employers should consider retaining, rather than replacing, older workers. That’s the argument put forth by the Canadian Chamber of Commerce in their discussion paper, Incenting Seniors to Continue Working. The paper examines key concerns that need to be addressed in order to pave the way for retention of older workers.
“By the start of the next decade, people old enough to leave the labour force will outnumber those old enough to join it. In Canada, we predict a labour shortage of nearly one million people by 2020,” says Perrin Beatty, president and CEO of the Canadian Chamber of Commerce. “We have been talking about this challenge for years, it’s time to start looking at concrete solutions.”
The report suggests that reform is needed to Canada’s tax and pension systems in order to accommodate seniors who wish to work, and that employers should consider flexible work arrangements—such as phased retirement, job sharing, telecommuting and flex time—that permit seniors to work while still maintaining a leisurely lifestyle.
While some pension reform is already underway with the CPP changes that are being rolled out over the next six years, the Chamber suggests that changes should also be made to Canada’s voluntary savings systems.
“If a DC plan or RRSP suffers major losses, individuals do not have the flexibility to make up for the losses, as they are limited to how much they can contribute annually,” the report says. “The federal government should increase tax-deferred contribution limits, allow DC and RRSP holders to save longer by delaying the age when they must stop making contributions (currently 71), expand the types of investments one can hold in these plans and reduce the amount an individual is required by law to withdraw (i.e., the minimum percentage) from a Registered Retirement Income Fund account each year.”
The full report is available on the Canadian Chamber of Commerce website.
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