Debt & Discrimination: What About The Grennies?

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The recommendations of the SAGE commission’s interim report are back in the news, with particular focus on the suggested mandatory retirement at 65 for government workers. The Director of advocacy group Age Concern told the Royal Gazette that having this kind of mandate would create a long term social catastrophe and warned the government that “[seniors] may walk straight to the polls and vote their way out of obscurity if that’s what it takes.”

Although the OBA has indicated that there will be no leadership challenge to our Premier next month (despite what the party constitution mandates), this isn’t exactly the kind of thing the new government wants to hear after less than a year in power.

That said, you can’t really blame seniors for being confused on where the OBA truly stands on the issue of employment and discrimination of senior citizens. Although they promised to eliminate age discrimination in their election platform , protection from discrimination in employment based on age didn’t get added last month to the Human Rights Act 2013. Minister Scott vaguely explained the reason for the omission due to ongoing investigation into the impact on pension cost:

“Mr. Speaker, […] whilst research and consultation is ongoing with respect to age discrimination as it relates to employment, […] we did not delay adding protection from age discrimination in relation to the provision of goods, services, facilities and accommodation.”

The House of Assembly did however extend protection from discrimination in employment based on sexual orientation, which was the right thing to do and a great progressive step forward for Bermuda. Unfortunately, the implication of being selective in this case is that the government only believes in providing human rights protections when it’s not potentially costly to do so.

That might seem harsh, but if the most we’re willing to pay for human rights is lip service then perhaps our societal problems are deeper than we care to acknowledge.

If Minister Scott is going to have this discussion in terms of dollars and cents, I would ask the question that is so far missing from the discussion: Why not encourage people to work past 65? Rather than taking the reactionary SAGE recommendation just to shrink the size of government, we might find that there are very real economic and health care cost benefits to be had by encouraging people to postpone retirement.

Regarding the fiscal benefits, Larry Burchall has pointed out a possible twofold economic benefit to postponing retirement:

“Government would still collect an overall 2.8% Payroll Tax for every 65 – 75 who keeps working. Right now Government collects nothing (zero) from any over 65 who retires completely.


The second but longer term national economic benefit would be that Bermuda’s national economy would benefit from employing more Bermudians who could be depended on to spend far more of their disposable income on and in Bermuda.”

The 2.8% payroll tax Mr. Burchall comes up with assumes an 80% payroll tax credit for seniors entering into the normal retirement age range, and it’s a very sensible way of providing government with some tax income while assisting seniors as they transition into retirement by letting them keep more take-home pay. Whether that take-home pay gets spent on goods and services locally or put into their retirement savings, the goal is giving seniors the freedom and independence to make the choice for themselves.

By doing this Bermuda would be following a similar trend in the United States of delaying retirement in favor of building up retirement savings:

“Because of the growing gap between actual savings and savings goals, many Americans are scrapping the idea of a concrete retirement age altogether and are instead working as long as it takes in order to save up enough to live comfortably in retirement.”

Not to mention that delaying the age at which people start receiving their pension benefits might also buy government some time to prevent the Public Services Superannuation Fund from running out of money by 2046.

If that’s not enough to convince you, then how about the quality of life and health care cost benefits of keeping active into your golden years? Recent studies have shown that a sense of purpose from your work has a huge impact on mental and physical health later in life:

“[…] medical researchers have found that a strong sense of purpose and well-being correlates with better physical health, especially in older adults. […] a sense that your life has purpose, and that what you do matters, may actually protect your brain from the clinical effects of Alzheimer’s disease.”

It seems like common sense that if health care costs are going to continue to rise in the near-term, then being healthier for longer could reduce the impact of that trend. If Bermudians want to keep working because it gives them a sense of purpose we should be encouraging that, not discriminating against it.

So come on, OBA… don’t let a campaign promise about ending discrimination be only that, especially if doing the right thing for equal rights might be the right thing for the economy, too.

– P.D.

How do you feel about this Bermy? If you have information about this topic, or feel like we’re missing some vital context then join the conversation by sharing your thoughts in the comments section below! 

Image Credit: Bernews


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