May 14, 2009
“I’m jack of it “…sewer repairer Richard Bishop wants to retire but the later eligibility for the age pension will affect his plans. Photo: James Brickwood
RICHARD BISHOP began working at 14 and after decades of hard manual labour he is keen to retire as soon as possible.
“I’m jack of it,” said the 57-year old who repairs sewers for a living. “I’ve just had a knee reconstruction and by the time I’m 60 I don’t think I’m going to be getting any better. I want to enjoy what I’ve got left.”
Mr Bishop’s plans to put his feet up have been derailed by the Federal Government’s plan progressively to raise the pension eligibility age to 67 from 2017.
He admits the plan will hurt him and he is not alone – most Australian workers will not applaud the initiative, according to social researcher Julia Perry.
“Employers don’t want older workers, and a lot of mature-age workers want out, too,” said Ms Perry, who produced the Too Young To Go report on older workers for the NSW Government.
To prefer to work beyond 60 has always been a minority taste. At most, 25 per cent of mature-age workers enjoy their jobs so much they want to keep going beyond the usual retirement age, research consistently shows. “Only a minority of workers have the kind of job that is exciting or fulfilling,” said Sol Encel, emeritus professor at the University of NSW who is an expert on the ageing population. “Work is a chore for most people, especially as they age.”
Yet most experts agree the decision to lift the pension age is a necessity in the absence of higher tax rates to fund burgeoning health and aged care services, as well as pensions and superannuation concessions for a greying population. Australia is following a trend set by the US, Germany, Iceland, Norway and Denmark. In Britain 68 is the age for pension eligibility.
Australia’s plan will affect workers now aged 57 or younger. Those aged 55.5 to 57 will not be eligible for a pension until they are 65.5 and those aged 52.5 or younger not until 67.
Australians appeared to be resigned to their fate, Professor Encel said.
In the past decade, workers have reversed the trend to early retirement. Since 1998, the proportion of men aged 60-64 in the workforce has risen from 43 per cent to 52 per cent, and the proportion aged 65-69 has jumped from 19 per cent to 27 per cent, with most working part-time. For women the proportion of those aged 60-64 in work has almost doubled to 36 per cent.
But most, Professor Encel said, were economic conscripts. “The boomers have come to realise they don’t have the money to retire at 60. They’ve got responsibilities upscale and downscale – ageing parents and dependent children,” he said. “And they know if they have to rely on the pension, they’ll suffer a dramatic drop in lifestyle.”
Ms Perry said it was regrettable to compel low-skilled and low-paid workers, many with health problems, to work longer for the pension if highly skilled workers continued to be able to retire early by accessing superannuation at 55 or getting it tax free at 60.
The Henry review of the tax system recommended the preservation age for super be aligned with the age pension age.
If employees are expected to work longer, employer attitudes will need to change, experts say. “It’s a good idea to encourage people to work longer but you have to encourage employers to employ them longer,” Ms Perry said.
David Murray, 57, a company director, said though he was unlikely to be affected by the change in the eligibility age, he had lost retirement savings in the downturn. “Most people have lost 25 to 30 per cent of their retirement funds, so it’s going to take them another four to eight years before they can start to recoup some of that. Most retirements have been pushed out anyway.”
with Jonathan Dart