We need a strategy for seniors

In Bermuda’s unique and little understood demographic situation, most people understand and accept that Bermuda has an ‘ageing population’. Translated. this means that the number of ‘pensioners’ and ‘seniors’ who have to be supported by the working population is growing faster than the working population.

In fact, if this Government would only wake up and close some of what Standard & Poors have several times described as “gaps in official data”, Bermudians might more easily see and understand that Bermuda’s problem is worse than is popularly thought. 

• Census 1991 showed 5,396 people over 65 with a counted National Workforce in that year of 34,619.  In round figures, 6.4 workers supporting each person over 65.

• Census 2000 had 6,722 over 65’s and a National Workforce of 38,017. So 5.7 workers supporting each over 65.

• Census 2010 reported 8,683 over 65’s and a Workforce of 38,097. Now 4.4 workers supporting each over 65.

Forward to 2012, and following the 1991 to 2010 trend, that 8,683 person group of over-65’s will now be larger — possibly 8,800. But the Workforce has now shrunk to 35,443. By 2012, we are probably at just 4.0 workers supporting each over 65. In 2013, we might be dipping under 4.0.  

So Bermuda’s still-shrinking economy is carrying a heavy and heavier burden of over 65’s.

The 2010 Census reported that Bermuda had 4,970 (call it 5,000) people aged between 65 and 75. In that same year, in a declining economy, with an acknowledged and unprecedented level of unemployment, Bermuda counted a 38,097 Workforce that contained 11,850 non-Bermudians on Work Permits. In 2012, going into 2013, the non-Bermudian count fell to 10,311 and the Bermudian worker count dropped down to 25,132. 

One easy, sensible, and I believe obvious solution, is to leave the pension payment retirement age at 65, but – except in special situations (Armed Forces, Police, Fire, etc… ) eliminate any mandatory retirement age. To help make the transition and encourage the employment of people between 65 and 75; give real tax credits to employees and employers.  

Tax credits could be as high as an 80% credit on Payroll Tax deductions. The employee’s deduction would go down from the current 5.25% to 1.05%. The employer’s portion would drop from 8.75% to 1.75%. The effect of both credits would be an instant pay raise of 5.2% to the person turning 65 and staying in work; and an immediate cost saving of 7% to an employer who keeps a Senior on the payroll.  

Government would still collect an overall 2.8% Payroll Tax for every 65 - 75 who keeps working. Right now Government collects nothing (zero) from any over 65 who retires completely. So that small revenue stream would be a definite Government revenue benefit. 

The second but longer term national economic benefit would be that Bermuda’s national economy would benefit from employing more Bermudians who could be depended on to spend far more of their disposable income on and in Bermuda. This would help offset the unmeasured (another one of those vexing and frustrating “gaps in official data”) but significant amount of funds that are currently earned in Bermuda but that are saved and transferred out of Bermuda and that never ever contribute to Bermuda’s national economy or GDP.

Should 65’s – 75’s only ever remain in their old jobs? That is, should the mason only ever continuing ‘laying block’ as a mason until he is 75? No. Absolutely not.

Bermuda’s whole Retail and Hospitality industries are prime candidates for specially employing Bermuda’s 65s – 75s. The Hospitality industry can actually anticipate ‘re-Bermudianizing’ itself by specifically taking on 65s – 75s in the Hospitality Industry’s soft interface jobs such as Concierges, Bartenders, Waiters, Front and Reception Desk people, etc… Leave the heavy lifting to the younger set.

The same in Retail. Wherever and whenever possible, use 65s – 75s. Maybe not selling skimpy shorts to teenage girls or low-hanging jeans to teenage boys; but lots of other stuff needs selling. Again, heavy lifting? Ordinary workers.

Following this concept, should 65s-0 75s work the full 40 hour week?  No. In this scheme, people can elect to draw their pension at 65 and receive the Payroll Tax credits, but can then not be required to put in more than 20-30 hours a week. What might look like a small handicap and obstacle can be easily resolved by job-sharing schemes worked out between mature people who, after reaching 65, have got a modicum of plain common sense and who know how the real world really works.

If a Senior elects to stay in full-time work  between 65 and 75, thought can be given to that person not being able to draw his/her Senior’s Pension from Government and also not being eligible for tax credits. However, that pension must be immediately available the instant that circumstances change.    

Especially now, Bermuda needs to think strategically and must think well forward – into 2020 and beyond.

In 2013, there are over 5,000 people between 65 and 75.  Younger Bermudians are neither procreating in sufficient numbers, nor are they choosing to live and work on the ‘Rock’. Younger Bermudians are either emigrating or not returning from the colleges and universities paid for by today’s over 45’s, over 55’s, and over 65’s. 

Bermudians really need to “think strategically and think ahead.”