Mitch Frazer talks pension plan turbulence amid COVID-19

Mitch Frazer has told Financial Post that a retirement age of 65 may not be possible in the coming years. “Everybody’s going to have to work longer,” he said.

In the article which discusses the turbulent state of pensions in the current economy, Mitch noted that people who are nearing retirement will find themselves in “much reduced” circumstances from earlier this year.

“The amount of money they have (to spread over their years of retirement) is reduced,” he said.

Speaking about people who are unable to return to work or are already retired, Mitch commented that “they’re in the toughest position,” and added that the low interest rates will dampen returns and retirees may be forced to rein in their spending.

“The only real option other than someone giving you money or winning the lotto is reducing your expenses,” Mitch said.

“But people don’t want to make (these decisions) and I don’t blame them. I wouldn’t either.”

Although retirees with DB plans will fair best in the current climate, Mitch noted that things would be tougher for smaller-company run pensions.

“If it takes seven years to get back to normal, companies are going to be hampered by their DB plans,” Mitch said.

You can read all of Mitch’s comments in the Financial Post article.

Read more of Torys’ insights on Pension and Employment on the relevant practice page.