Why mandatory retirement ages should be a thing of the past


Alysia Blackham, University of Melbourne

Mandatory retirement ages are – rightly – mostly a thing of the past in Australia. But they still linger both formally and informally in some sectors and roles. This is of major concern for a country with an ageing population, such as Australia.

Compulsory retirement ages have been progressively prohibited in Australia since the 1990s. There are good reasons for this: reliance on irrational stereotypes about older workers can prevent businesses from finding the best person for the job. Allowing workers to choose when they retire can improve staff retention, increase workforce morale, and help employers retain vital skills and experience.

At a national level, prohibiting mandatory retirement can help relieve the burden of an ageing workforce on pension systems. It also promotes labour market supply and removes barriers to older people participating in society.




Read more:
Keeping mature-age workers on the job


Abolishing mandatory retirement can reduce welfare expenditure and increase self-reliance. Importantly, it recognises the inherent worth and dignity of workers of all ages, and sends a strong national message about the importance of ending age discrimination.

Where mandatory retirement remains

Federal Australian judges must retire at the age of 70, as outlined in section 72 of the Australian Constitution. While section 72 does not generally apply to state or territory courts, all states and territories also impose a retirement age for their judges. These range between ages 65 and 72.

The Australian Defence Force has also maintained a mandatory retirement age of 60 for personnel and 65 for reservists, though this can be extended on a case-by-case basis.

In Australia, federal court judges have a mandatory retirement age of 70.
Shutterstock

Overseas, some countries still allow mandatory retirement. The UK, for example, allows employers to justify a mandatory retirement age for their workforce. The UK Supreme Court has identified two broad categories of legimitate justification: intergenerational fairness and dignity.

Retirement provisions have been retained by some UK universities, including Oxford and Cambridge. These organisations have claimed that retirement ages are justified by very low turnover, which may limit progression for other staff. They also cite the need to increase staff diversity, refresh the workforce, and facilitate succession planning.




Read more:
How we could make the retirement system more sustainable


My research on how Australian universities are operating without mandatory retirement shows that there has been an increase in the number of academics working longer. The percentage of total academic staff at Australian universities aged over 64 increased from 0.96% in 1997 to 4.66% in 2012.

Extending academics’ working lives may be affecting the employment prospects of younger academics, particularly in relation to the availability of permanent academic posts at junior levels. Overall, though, there have been few negative impacts from the removal of mandatory retirement ages in universities.

I found Australian universities value the experience and skills of their older academic workforce, and explicitly reject any link between age and declining performance.

Judicial retirement ages

Even for the judiciary, mandatory retirement ages are outdated and inefficient. When they were introduced at the federal level in 1977, retirement ages were intended to “contemporise” the courts by introducing new people and ideas. They were designed to prevent declining performance on the bench and provide opportunities for younger judges.

But the workforce and our attitudes to older workers have changed since 1977. My research found that mandatory retirement ages for judges are inconsistent with modern workplace practices and are contrary to the desire for age equality. There is no evidence that older judges are “out of touch”, and age is a bad predictor of individual capacity.

Instead, judicial retirement ages may deprive the courts of expertise and experience. Retirement ages also appear to be contrary to the wishes of judges themselves. Justice Graham Bell, who retired from the Family Court of Australia on 20 February 2015, was quoted as saying:

These days 70 is equal to 60 or 55. … Judges should be able to go on till 80 provided they pass a medical inspection. After all, the pension makes judges pretty expensive creatures in retirement. They are sent out to pasture too early.

What’s more, judicial retirement ages are largely unnecessary in practice. Judges are entitled to generous pensions and often retire of their own accord. New judges will still be given opportunities even if we remove mandatory retirement ages.

Informal retirement pressures

Where mandatory retirement has been officially removed, there can still be pressure to retire at a certain age. My research found that some Australian universities may be using potentially discriminatory methods (such as redundancy) to manage an ageing workforce.

A significant proportion of older Australian workers report experiencing age discrimination. In 2014, over a quarter (27%) of Australians aged 50 years and over reported experiencing age discrimination in employment in the last two years.

Given these findings, in 2016 the Australian Human Rights Commission (AHRC) conducted a national inquiry into discrimination against older workers. It recommended a suite of changes including discrimination law reforms and appointing a cabinet minister for longevity.




Read more:
Age discrimination in the workplace happening to people as young as 45: study


Previous studies have suggested that declining numbers of older men in the workforce are mostly due to employer constraints, not constraints on the part of older workers. This suggests the need for a shift in employers’ attitudes towards older workers, to encourage continued participation.

Why mandatory retirement ages are inefficient

With an ageing population, Australia cannot afford to lose skilled workers prematurely. In 2013, the Productivity Commission estimated that overall labour supply per capita will fall by nearly 5% by 2059–60 due to demographic ageing. The commission concluded that:

A period of truly diminished outcomes is likely to be at hand, unless luck or appropriate policy initiatives intervene.

The ConversationOne of the key policy measures available to address this looming issue is to increase workforce participation rates for older workers. Eliminating the last vestiges of mandatory retirement is an obvious first step.

Alysia Blackham, Senior Lecturer in Law and ARC Discovery Early Career Research Fellow, University of Melbourne

This article was originally published on The Conversation. Read the original article.

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Australia is one of the world’s best places to retire, or is it?



File 20180329 189795 kzxsmm.jpg?ixlib=rb 1.1
Happiness in retirement isn’t the same for everyone.
Tom Carmony/Flickr, CC BY-NC-ND

Rafal Chomik, UNSW and David Rodgers, UNSW

Australia is ranked in the top third of countries in almost all indices measuring the best countries to retire, according to our analysis of nine separate ageing and retirement indices.

The problem is, experts contriving such indices can’t agree about which ingredients should be included and which are most important.

The flaw of averages

While composite ageing indices provide us with what appear as simple comparisons, the underlying methodologies are complex, prone to judgement, and can be tweaked to obtain certain results.

Using indicators that aggregate outcomes for the older population within a country also ignores differences between people within this population. Sub-indices by gender and more granular age-groups do exist, but one improvement could include an inequality adjustment based on outcomes by socioeconomic status or income.

What about just asking people about their life? Studies that compare differences in people’s own evaluations of life across countries show these are substantially explained by social and economic differences across countries. And when comparing individuals in high-income countries such as Australia and Britain, good physical and mental health appear most correlated with life satisfaction, while in middle-income countries like Indonesia, income is more important.

But that doesn’t differentiate by age. When the OECD asked older people across rich countries what mattered to them, they said that “health” and “environment” were most important while “civic engagement”, “community” and “income” domains were less so. By contrast, younger groups attributed less weight to “environment” and more to “income”.

Such indices usually involve scoring a country in several categories and combining these into a composite score and ranking. Done well, these can reveal how life in one location is better than another and in which categories it is lagging.

So what do existing indices suggest is important for older people’s well-being? And which countries come out on top?

Ingredients for a good old age

The ingredients used in an overall index differ, ranging from the employment rates of older people in each country, to their political participation, income, levels of exercise, and life expectancy.

These indicators and weights are often chosen subjectively by experts constructing each index. Some comparisons focus on current standards of living and comprise social, environmental, health, and economic indicators. These are probably more immediately relevant to people.

By contrast, indices that aim to measure the likely future for older people mostly comprise financial indicators and those that relate to retirement income system design, demography, and economic conditions. These are probably of greater concern for those thinking ahead about the impacts of population ageing.

Where to retire?

Despite the flaws with such comparisons, few people can help themselves. So how does your country rank?

European countries – particularly Nordic ones – are consistently highly ranked across ageing indices (see figure below). Such results reflect their high health outcomes, high incomes, generous social welfare, and comparatively well-designed retirement income systems. These are also countries that top the subjective happiness rankings.

https://cdn.theconversation.com/infographics/251/a4b6d81ee4291bb9594ed94e7418ca580cb214a7/site/index.html

Lower and middle-income countries receive lower rankings from the current well-being indices in which they feature. India and China, where there is low public provision for retirement, occupy high rankings among indices that emphasise fiscal sustainability over the quality of life of older people.

Australia is ranked in the top third of countries in almost all indices. It ranks particularly highly in the Melbourne Mercer Global Pension Index, largely due to the design of its retirement income system.

The ConversationFor what it’s worth, one could take an index of these indices to summarise. Such an index, call it the CEPAR meta-index of ageing, indeed shows Nordic countries taking the top three places, followed by Australia and the US, with the UK coming somewhere in the middle of 25 countries – apparently well ahead of places like France and Italy. Something to ponder when contemplating the good life in old age.

Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW and David Rodgers, PhD Student in Economics, UNSW

This article was originally published on The Conversation. Read the original article.

Why retirement village contracts need to be regulated like insurance


Timothy Kyng, Macquarie University

While you may think signing a retirement village contract is similar to buying a house or apartment, it isn’t. Retirement village contracts resemble insurance contracts more than purchase agreements, only they aren’t regulated like insurance products.

The lack of regulation increases the risk for retirees. They face considerable delays in receiving their payments when they leave, costs due to the delay, and the potential loss of all payment from companies that don’t need to meet the financial standards of an insurance company.

Most retirement village contracts provide the consumer with a combination of the right to reside in the retirement village (until death, incapacity for independent living, or voluntarily relocation) and an “exit payment” upon leaving. As both the amount and timing of this payment depends on the resident’s death or ill health, the payment is a de facto insurance payout.

This makes the retirement village contract a combination of the right to reside and a de facto insurance policy. But the insurance policy comes from companies that wouldn’t normally be allowed to sell insurance.

Retirement villages are mostly small private companies or not-for-profit organisations. This means they aren’t required to publish their annual financial statements, hold reserves, or have reinsurance arrangements like an insurance company. The consumer can’t be confident that the retirement village is financially healthy and able to pay out the exit fee, due to the absence of information about their accounts and financial condition.

Fees and more fees

There is a great variation in the structure of the fees that retirement villages charge – entry fees, ongoing fees and a so-called “deferred management fee”, which is an amount taken out of the money refunded to departing residents.

These fees can be substantial – the entry fee alone is often comparable with the cost of buying an apartment. Although the amount varies by location, one operator told a Victorian parliamentary inquiry the entry fee was equivalent to 80% of the cost of a house nearby.

A retirement village contract might have an entry fee of A$1 million, a deferred management fee of 6% of the entry fee per year of residence, and a maintenance fee of A$500 per month.

For a contract with a A$1 million entry fee, after five or more years of residence, the deferred management fee is A$300,000, so the exit payment is A$700,000. But the deferred management fee can vary greatly. It may be 10% per year for three years, or 3% for 10 years etc.

The exit payment can also include some share of the resale value of the apartment. But the retirement village needs to be able to pay out this exit payment.

The need for proper regulation

The assets held by retirement villages are almost all invested in real estate. This is risky, as they aren’t diversified and their assets can’t be easily turned into cash.

When a retirement village has to pay a departing resident their exit payment it may take a long time to sell their apartment, which could involve a loss on resale. This can also lead to delays in receiving exit payments.

After signing their retirement village contract, residents are also in a weaker bargaining position than a traditional tenant in a normal pay-as-you-go rental arrangement. This is because residents have already paid their rent in advance for the rest of their life, and it usually costs a lot of money to get out of these contracts.

In some retirement village contracts the resident may be forced to spend a lot of money on renovations – such as for a new bathroom and kitchen – so that the apartment can be sold and they can get the exit payment.

This issue is compounded by the complexity of the contracts, which can be hard for both consumers and financial advisers to understand.

This creates substantial risk for consumers, and the lack of a requirement to publish financial statements and related information makes it very difficult to assess the financial soundness of a retirement village operator.

If retirement village contracts are in fact insurance agreements, then they should be regulated differently – by the Australian Prudential Regulatory Authority and not by state governments, as is now the case.

The ConversationIf retirement villages were properly regulated then consumers would be better protected from failure of operators and better protected from delays and capital losses when they get their exit payment.

Timothy Kyng, Senior Lecturer, Department of Applied Finance and Actuarial Studies, Macquarie University

This article was originally published on The Conversation. Read the original article.

Cricket: Brett Lee Retires from International Cricket


  1. Australian Brett Lee quits international cricket saying ‘It just felt like it time to go’

Cricket: Australia – Australia Defeat India 4 Zip and the Big Bash 2012 Final


What a great day for Australian Cricket, with Australia wrapping up the test series against India 4 – 0 and the hugely successful 1st season of the Twenty20 Big Bash being completed tonight, with the Sydney Sixers defeating the Perth Scorchers.

It has been a massive day of cricket, with Michael Clarke, Ricky Ponting, David Warner, Peter Siddle and Co, playing great cricket in the series win against India. Who will forget the massive triple century of Michael Clarke, the partnerships of Clarke and Ponting, the dominance of Australia’s bowling attack and the capitulation of the Indian team under relentless pressure from Australia. Both Shaun Marsh and Brad Haddin should be concerned about their immediate future in the team, with poor performances by them both throughout the series. Both Ponting and Michael Hussey silenced their critics with very solid performances in the series and David Warner has cemented his place in the team for the time being.

India however were very disappointing and several big name players should be looking at retirement – if not, they should perhaps be replaced. All the big names struggled, none more than Dravid and Laxman. Even Sachin Tendulkar struggled and at no time did it seem likely he would make his 100th international hundred.

The Big Bash Final win for the Sydney Sixers was set up right from the beginning with a brilliant first over by Brett Lee. It was a brilliant opening partnership between Moses Henriques and Steve O’Keefe that ensured the Sixers could chase down the total set by the Scorchers comfortably.

For more visit:
http://www.cricket.com.au/news-list/2012/1/28/australia-seal-whitewash

http://www.bigbash.com.au/
http://www.espncricinfo.com/big-bash-league-2011/content/story/551379.html

Plinky Prompt: My First Job


My first job was working as a Handyman in a retirement village. I made my way up the ladder from Handyman to Leading Hand to Maintenance Manager. I worked in the same village for twenty years.

Powered by Plinky

Euthanasia bill unexpectedly defeated in South Australia


In a surprise victory for pro-life advocates, South Australia’s Upper House has narrowly voted down an amendment to their palliative care legislation that would have legalized euthanasia, reports Patrick B. Craine, LifeSiteNews.com.

The bill was proposed by Greens member Mark Parnell. It was expected to pass 11-10, with the support of independent member Ann Bressington, the swing vote. Bressington opted to abstain, however, after amendments she had sought failed. This abstention would have resulted in a tie, meaning that Upper House President Bob Sneath would vote to pass the bill.

In the end, however, member David Ridway announced to the shock of pro-life observers that personal reasons had led him to change his mind, and he voted against the bill.

Parnell has stated his intention to make another attempt at legalizing euthanasia after the state elections in March 2010. With the upcoming retirement of two pro-life members, pro-life advocates have indicated that such an attempt has a real risk of succeeding.

The UK-based anti-euthanasia group SPUC Pro-Life called the vote "a victory for civilised values."

Anthony Ozimic, SPUC’s communications manager and an expatriate Australian, stated: "Those seeking to develop civilised values which respect the sanctity of human life should be encouraged by this vote.

"In spite of all the money, media support and propaganda of the euthanasia lobby, many politicians recognise the dangers to public safety in introducing such legislation. This victory for civilised values joins the recent defeat of a similar bill in Tasmania, as well as the repeated votes by the British House of Lords against assisted suicide."

Report from the Christian Telegraph 

CRICKET: AUSTRALIA V SOUTH AFRICA – FIRST TEST


The First Test between Australia and South Africa is a fascinating contest as both teams strive for dominance. Before lunch on the fourth day it is clear that Australia has now clearly gained the upper hand and a tremendous lead over South Africa that is fast approaching 400.

The stars for Australia in this match have been Mitchell Johnson and Brad Haddin, though it has been a team effort. The only exception has been Matthew Hayden who is still struggling for form and has perhaps reached that point in his career when retirement has perhaps become the clear choice for his immediate future.

BELOW: Report on Mitchell Johnson at the end of the second day (Same footage in both videos)