Is mandatory retirement outmoded and ageist, or is it a useful business convention, like 40-hour work weeks, that helps human resources departments run smoothly?

Opposition to mandatory retirement is continuing to grow, strengthened by the voices of several politicians, including 65-year-old Prime Minister Paul Martin, and 48-year-old Ontario Premier Dalton McGuinty.

So when the C.D. Howe Institute released a report late last month extolling the virtues of enforced retirement, let's just say that employers and seniors' advocates had a few strong opinions.

The report, penned by University of Toronto industrial relations and economics professor Morley Gunderson on behalf of the public-policy think tank, insists that mandatory retirement is good not just for business, but for employees, as well.

"The relevant question is not: Are you for or against mandatory retirement? Rather, it is: Are you for or against allowing private parties to enter into arrangements such as mandatory retirement, presumably as part of a broader employment contract involving such components as pensions," the report asserts.

Indeed, even if other provinces join Manitoba and Quebec in banning mandatory retirement, there are other administrative conventions in place that make staying on the payroll beyond age 65 untenable from both the employer's and the employees points of view.

For instance, assuming the employer and employee want to keep working together after the employee's 65th birthday, it would be prohibitively expensive to maintain that employee's benefits at the same level.

"Some employers have a drop-dead date --that's probably not the term I should use --a cessation date for employee benefits," says Bob Levasseur, a senior consultant with the international human resources company The Hay Group.
"Life insurance benefits often change at 65. For long-term disability, you can't renew benefits after age 70."

Providing those types of benefits to older employees is extremely pricey, for the simple reason that the older you get, the more likely you'll be to collect.

Costs aside, the C.D. Howe paper contends that keeping mandatory retirement in place is a good management move. "It may facilitate retiring with dignity and reduce the need for more constant monitoring and evaluation and possibly ultimate dismissal of older employees," the report states.

Those in favour of ending mandatory retirement point to polls and statistics indicating that an increasing number of Canadians would like to work beyond age 65. For instance, in a Decima Research poll commissioned by Investors Group, one-third of respondents said that mandatory retirement should be banned.

Although mandatory retirement isn't enforced under any law in Canada, it is written into collective agreements or corporate policies at most workplaces.
And despite the fact that British Columbia, Saskatchewan, Ontario and Newfoundland have no policies in place to protect the workplace rights or treatment of employees over 65, the C.D. Howe Institute's report asserts that an employee who is required to retire at 65 isn't a victim: "The employee can seek employment elsewhere and sometimes can continue with the original organization, usually under a new contractual agreement."

Mr. Levasseur agrees, saying, "Oftentimes -- and these are mutual agreements -- the employee isn't interested in working five fullish days a week, and is maybe interested in helping out on a more casual basis."

That might be true for high-level executives, says Judy Cutler, a spokesperson for CARP, the advocacy group for Canadians aged 50 and up, but post-retirement opportunities for the vast majority of employees simply don't exist.

"How many Canadians are in a position and have the skill to be a consultant?" she asked, adding that job seekers as young as 45 often have a hard time convincing a new company to hire them.