Aging Baby Boomers Delay Retirement

It’s the biggest demographic shift to hit B.C. in decades. The oldest baby boomers ?are now just a year away from retirement, and workers and employers alike are ?struggling with the change. Some, as the case of ex-MuchMusic host Terry David ?Mulligan indicates, are faring better than others.

Baby boomer Terry David Mulligan fought mandatory retirement and now works for himself.

It’s the biggest demographic shift to hit B.C. in decades. The oldest baby boomers 
are now just a year away from retirement, and workers and employers alike are 
struggling with the change. Some, as the case of ex-MuchMusic host Terry David 
Mulligan indicates, are faring better than others.

For someone who felt he’d almost had it all, the legal papers Terry David Mulligan received in mid-November of 2007 left him incredulous. Boomer that he was, familiar with the ’60s mantra of drugs, sex and rock ’n’ roll, comfortable with the entitlements of his generation, he’d ridden the wave of North American pop culture to celebrity: emceeing the benefit concert at the founding of Greenpeace, surviving Janis Joplin’s efforts to outdrink him over a bottle of Southern Comfort, schmoozing with the Grateful Dead, Jimi Hendrix and George Harrison, hosting CBC Television’s Good Rockin’ Tonite, working for Much­Music and interviewing everybody who was anybody in Hollywood for decades. He had a wife, four kids, a mortgage and a six-figure income. 

Then, out of the blue, came the package from his employer. At age 65, Mulligan heard that, after 24 years with CHUM and its new owner CTVglobemedia Inc., he was being let go. His last day of work would be six weeks later: December 31, 2007. No explanation, no apology and a minimal severance package since he had, CTV argued, begun receiving his CPP pension. It was just a coincidence, he was assured, that a new B.C. law prohibiting mandatory retirement at 65 would come into effect one day later: January 1, 2008. 

For the millions of Canadian baby boomers (born between 1946 and 1962) who soon face the prospect of careers ending, pensions beginning and the insults of age, the assurances of past comfort provide little relief. Today the median age of boomers is 54, and numerous studies indicate that almost half of them plan to retire at 60, or earlier. Still other studies indicate that, with mandatory retirement now removed from every provincial jurisdiction, a lot of Canadian boomers don’t plan, or can’t afford, to retire – ever. A few things are clear: the percentage of employed people who are 55 to 64, those currently riding the crest of the boomer wave, will rise dramatically in the next decade and will comprise 20 per cent of the entire Canadian workforce by 2020. Conversely, the percentage of gen X and Y workers will shrink. Where today there are five active workers for every pensioner, by 2030 the ratio will be three workers for every pensioner, putting significant pressure on employers, health-care financing and pension plans for many years to come. 

So hundreds of thousands of B.C. boomers and hundreds of local companies and institutions are about to confront the complex (and sometimes frightening) consequences of this demographic tsunami. But the natural volatility of the boomer generation makes it hard to predict exactly what’s about to happen. Retire early and travel? Never retire? Take the company buyout? Work part time? Start a new business? Divorce, sell the house and grab a backpack? Businesses and policy-makers, trying to figure out how to deal with the impending boomer-propelled disruptions and demands, have no precedents with which to measure what will survive 
and what will tumble, and what needs adjustment now.

[pagebreak]SOMEONE WHO KNOWS A LOT about the challenges facing boomers is New Westminster’s Terry Colton, 67, a social psychologist and former president of the Retirement Planning Association of Canada (B.C. chapter). On occasion, he’s employed by businesses and governments to prepare boomers for post-working life. He has found there are, in fact, two generations of boomers. The older ones, who grew up in the immediate aftermath of the Second World War – people such as Terry David Mulligan – had Depression-era parents who often imbued their children with the values of frugality and savings. Then there are the younger boomers who grew up in the affluent ’60s and often came to think everything would always be wonderful. This group, now in their early 50s, has an exaggerated sense of entitlement, says Colton. “I see their eyes glaze over at the words ‘retirement planning.’ They think it’s a fire drill: there’s nothing to worry about. They’re not preparing, not saving, not investing the way older boomers are.” 

Colton also observes that people whose working lives contain a lot of flexibility – the self-employed, academics, pilots, scientists, consultants and small-business owners – seem to have a more positive approach to retirement than those whose working life has been regimented. “For those people who think, What I do is who I am, the prospect of retirement brings a sense of purposelessness and depression. It’s a huge issue. They come home from the job, and their wives say, ‘What are you doing here?’ ’’ Colton says. “They don’t know the answer. So they go to the bar. And in a few years, they’re dead.”

And then there are single boomer women, who also often face a tenuous future. Divorce rates peak at 48 per cent in the 55-to-59-year-old group. By age 60, women are earning, on average, a third less than men their age ($30,000 women; $44,000 men). And having spent their younger years raising children in many cases, boomer women have fewer savings, RRSPs and pension benefits. Plus, they live longer. Freedom 55 is not an option. Money, or the lack of it, is the single greatest concern, Colton observes, for retiring boomers. Colton’s own concerns are, he admits, more mundane: now that he and his wife are downsizing from a 2,800-square-foot home to a condo, can he keep his prized hockey stick, autographed by Wayne Gretzky?

Fortunately for Terry David Mulligan, who says he never thinks about money, his financial affairs have been maintained for 34 years by his diligent wife, Meg. Mulligan is happy to let her deal with the vicissitudes of the stock market, the daily bills and the practicalities of four (now grown) children. Together, they have a recently purchased a 100-year-old farmhouse in Naramata to look after, and nearby Mulligan has his newly converted barn-recording studio, its counters piled to geological levels with the detritus of a life in show biz. “At first I was furious,” he admits, reflecting on CTV’s actions. “It was age discrimination! I found myself asking, Where do I go from here? Unemployed at 65. But I’m always scheming. Life’s too short for worries.” So rather than work for a company, Mulligan decided he’d work for himself. 

The triple effects of boomer retirement, the escalating burden of corporate pension plans and the fallout from the recent recession have forced many companies, like CTV, to look closer at what strategies are needed to minimize looming disruptions and cut costs. Below are three local examples. 

At MacDonald Dettwiler and Associates Ltd.’s (MDA) data and telecommunications headquarters in Richmond, 12 per cent of the company’s 924 employees are baby boomers, almost half engineers and skilled technicians. Typically these days, the oldest MDA workers are curtailing their hours but continuing – as is happening elsewhere – part-time employment for months or years, with in-house consulting projects or training their replacements. With post-2008 worries about investments and pension constrictions, fewer boomers are cutting ties to their jobs abruptly. 

At BC Hydro, 1,000 of its 5,800 employees, 18 per cent, are aging boomers. This group is comprised of a lot of engineers, skilled technicians and management personnel whose retirement numbers will peak around 2018 when many will be hitting 60. To replace these people, BC Hydro has instituted a “pipeline employees” program, aimed at training younger workers to assume soon-to-retire boomers’ positions. 

At Vancity, with 2,384 employees and the proportion of boomers at roughly 25 per cent, older staff and management are being offered a variety of options – flex time, part time, job sharing, mentorship and flexible pension arrangements – in an effort to provide personnel with choices as global economic fears and B.C.’s notoriously high cost of living (with housing prices 50 per cent higher than the Canadian average) compel workers to reconsider once-touted Freedom 55. These days, with ever-rising longevity statistics, retirement for many will last 20 to 30 years. 

But as much as companies say that they’re preparing for the consequences of boomer aging, research by the Human Resources Professionals Association in 2008 says otherwise. Almost half of Canada’s larger companies (from 50 to 5,000 employees) report they expect to lose 20 to 40 per cent of their personnel as a result of impending boomer retirements. But 83 per cent of these companies acknowledge they are either “somewhat” or “poorly” prepared for that eventuality.

[pagebreak]THE WORM IN THE APPLE, so to speak – for boomers and for businesses in general – is pensions, both private and public. What is going to happen when the myriad survivors of the country’s original 9.8 million boomers all decide to consume, in their later years, the promised golden fruit of their employment labours? Or will the pension gold, in an alchemical reversal, turn to lead? Dealing with pension funds’ depletion in an age of economic uncertainty – along with rocketing health-care costs – will be one of the most widespread topics of boomer-inspired books, government studies, political punditry and public outrage in the years ahead. There are no simple answers. 

Alan Black, 65, gets to consider this first hand. He’s the manager of pensions and benefits for SFU’s 2,800 employees. And like others involved with pension management for the 472,000 people in B.C.’s public service, he is worried. “Recent events in the capital markets,” he says, “have destroyed perspectives. We’re obligated to pay pensions. But we need a good return [on investments] in the capital markets. And I don’t think we’re going to see that soon.” In 2007 when the economy was strong and the first boomers were beginning to retire, SFU faced a $22-million shortfall in its employee pension funds (a shortfall, in this case, representing an off-the-books projection of future pension payments if large numbers of staff all decided to retire at once). 

Black suspects, given recent economic events, an impending 2010 actuarial evaluation of the SFU pension books could well reveal a shortfall of $60 million. “Well, France has a $60-billion deficit!” he adds, laughing. “And the States? California? Canada? It’s not easy these days. But we’re not alone.” Black admits that he, like dozens of older SFU employees he’s talked with, cannot afford to leave his job. Like so many boomers, his investment portfolio took a shellacking in late 2008.

At every level – from the personal to the corporate to the provincial and federal – some of the first volleys in the debate over the economic consequences of the boomers’ pensions are being fired. Said Kevin Page, Canada’s parliamentary budget officer, in a report to Parliament this past February: “The major demographic transition that is underway will strain governments’ finances over the next several decades.” By 2030 more than 25 per cent of all Canadians will be over 65. So, lower boomer pensions? Hike taxes? Cut spending? Set up voluntary provincial pension supplements, as B.C. and Alberta have recently discussed? Or encourage boomers to continue working until they’re 70? With funds diminished by the 2008-09 recession, that would suit many pension managers fine. In the cruel calculations of actuaries, the longer you work and the sooner you die, the less the total corporate pension payout. 

Having survived Janis Joplin’s efforts to drink him under the table, and the decades of abuse attendant to living in the vortex of rock ’n’ roll, Terry David Mulligan was not inclined to meekly accept being fired by CTVglobemedia for turning 65. He sued, and then applied the money from his out-of-court legal settlement to the renovation of his Naramata recording studio. He’s content. But he still bemoans the fact – opinionated boomer that he is – that today’s rock TV is all about bling and shakin’ your booty, its programs moderated by kids who don’t know Frank Sinatra from Frank Zappa.

Mulligan has no plans to stop working, or even to slow down. In fact, like the 75 per cent of boomers who report they do not plan to fully retire but instead to keep active in freelance jobs, Mulligan is seizing new opportunities. With two cats underfoot in his cluttered barn-studio and Josie, his two-year-old golden retriever, out in the orchard that stretches down toward Okanagan Lake, Mulligan gestures beyond the windows and boasts, “I get to do nothing.” Then, waiting the showman’s long beat, adds, “Nothing’s good!” 

But the truth is more complicated. He has two regular radio shows to record, a book in the works and his newly planted vineyard of Moscato grapes to oversee. Plus, he and his media partner, actor Jason Priestley, are hosts of Hollywood & Vines, a wine and food series that airs on Super Channel and features the two travelling around the world, interviewing chefs and winemakers in Chile or New Zealand or Spain or wherever – and drinking an awful lot of very good wine. If this is what being an old boomer is about, his expression says as he reports all this, well, bring it on! 

Having almost had it all, a lot of boomers like Mulligan face the evidence of aging with a certain amused equanimity: I was young once – and now I’m not. Says Mulligan: “I’m 68. I never dwell on it. I get to work in my vineyard. I get to go for long walks around Naramata. I get to travel the world. I don’t think about money. Things work out. I’ve put my diva moments behind me.” And he shrugs, surveying the view beyond his vineyard and orchard-enclosed recording studio. Then adds, “I asked my physiotherapist the other day, ‘How do I look?’ ” 

“Old and ugly,” came the immediate answer.

“I said, ‘Thank you.’” 

And they both had a good laugh.