Construction work is hard on the body and being able to retire with a full pension before the age of 65 should be considered as the Canada Pension Plan evolves, says a human resources professor.
"Over 75 percent of Canadians do not feel prepared for their retirement but they stay in the workforce. We’re chasing the pension," said Carolin Rekar Munro, a professor in the faculty of management at Royal Roads University in Colwood, B.C.
One of her research "passions" is why people decide to remain in the workforce past their best-before dates.
"It’s the hang on factor. People feel they have no choice," she said.
But the problem, particularly in construction or other labour-intensive jobs, is that the punishing nature of the work can hamper performance.
"We’ve got to give them (workers) a way out," Munro said.
Costs climb when older employees are kept on the payroll, she explained. Greater absenteeism, error rates, injuries and benefit use are all factors. As performance diminishes, shoddy construction can occur, she said.
"That’s when it starts to make sense, to make it attractive enough for older workers not to stay in the workplace," Munro said.
In addition to covering up injuries, older workers may self-medicate with drugs or alcohol, which can contribute to fatigue and affect work performance. Older workers also require more time to recover from injuries. Employees in their 60s take four times longer to get over an injury than an 18-year-old, Munro said.
A 10-year (1998-2008) U.S. study of workers aged 50 and over found that compared with white-collar workers, construction workers had increased odds of arthritis, back problems, chronic lung disease, functional limitations, work disability and work-related injuries. The Health and Retirement Study recommended that retirement and pension policies should address the needs of older construction workers.
A German study of almost 5,000 construction workers, aged 40 to 64, found that compared with white collar workers, construction employees had a higher prevalence of hearing deficiencies, signs of obstructive lung diseases, increased body mass and musculoskeletal abnormalities. Construction workers’ disability rates were also eight times greater.
In Canada, depending where construction industry employees work, they may have personal, union or workplace pension plans. All contribute to the CPP, which, at age 65, is bolstered by Old Age Security. Low-income seniors get the Guaranteed Income Supplement. Canadians can draw a reduced CPP at age 60.
A recent federal proposal to enrich the CPP so that retirees have higher incomes was welcomed by most provinces.
Occupations with generous employee collective agreements, such as firefighters, police officers, Canadian Forces members and teachers, can retire with full workplace pensions at age 55 or 60.
The vice-president of the B.C. Regional Council of Carpenters admits carpentry is very demanding.
"The work can beat up your body," said Hamish Stewart. "If you don’t take care of your body, it won’t take care of you."
Typically, young employees do heavy, industrial jobs while older workers move to inside jobs, such as finishing work, he said.
Stewart has seen carpenters retire at age 55 but they get bored and return to work.
In B.C., 65-year-old journeymen carpenters toil away at various worksites.
There’s also been concern about labour shortfalls if all of the baby boomer employees retire, but Stewart said there’s never been a problem with a shortage of carpenters on Vancouver Island.
"We have a mechanism to bring in workers from across Canada, or America," he said.
A social policy professor at the University of Victoria said that inequities in pension plans are a reality.
"If somebody stops working at age 55 in construction there’s not much there in terms of public programs. Unless they have their own plans, their own RRSPs, they have to wait until they’re 60," said Michael Prince.
"People with aches and pains, injuries, soldier on and their condition worsens. By their late 50s or early 60s, with their bodies worn down, construction workers are asking, ‘Where’s the safety net?’"
He believes there’s definitely a market for employee-led pension, insurance and health plans, particularly as there’s a shift away from union jobs with good benefits and defined benefit plans. A dedicated group of workers would join forces to create their own plans.
One pension misconception is that the CPP doesn’t have enough funds for the coming waves of retirees, but Prince said that’s fear-mongering by the financial services industry, which wants people to buy their products.
The CPP has $300 billion in assets, he said.
Something to consider, said Prince, is the federal government’s promise to spend billions on infrastructure over the coming years. With the construction industry front and centre on the vision it could be a chance for the industry to seek concessions on pension plans for construction employees.
Munro would like to see B.C.’s provincial government pilot a pension project for workers in physically demanding jobs. But a national trial would be even better she said.
A starting point would be to define what is physical effort, the frequency of the effort and under what conditions the worker exerts their body, Munro said.
It’s also incumbent that workplace education about retirement starts early and that the language around retirement options/plans is crystal clear so that workers understand exactly what they get and don’t get, she said.
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