1 AASCIF Convention 2015: Bridging the Future San Francisco July 6 Terrance J. Bogyo Independent Researcher | Speaker | Consultant Introduction: Who is this presenter? Terrance (Terry) J. Bogyo (BSc, MBA, CCRC, RRP) Independent Researcher | Speaker | Consultant 1665 58 A Street Delta, BC V4L 1X5 e-mail: [email protected]Blog: www.WorkersCompPerspectives.wordpress.com Phone: (604) 943-3545 Skype: terry.bogyo Canada and California are not so very different when it comes to Workers’ Compensation Canada Employed labour force 2014: 17,802,200 Estimated covered by workers’ comp boards: 2013: 14.8 million Actual [weighted]Average Assessment Rate for Assessable employers [2013]($/$100): 1.94 California Employment Dec 2014: 17,566,281 Estimated number of workers covered by workers’ comp insurance: 2014: 14.7 million Average Workers’ Compensation Insurer Rate per $100 of Payroll, as of June 30, 2014 (Dollar $): 2.96 Canada and California are not so very different when it comes to Workers’ Compensation Canada Typical TT Compensation rate: 90% of Net Earnings No waiting period Max insured 2014: varies by province- BC: $77,900 Alberta: $92,300 Manitoba: No Max, Ontario: $84,100 Administration Costs for Assessable Employers ($000's) ($) 2011: $1,474,841 [No equivalent for underwriting profit] California Typical TT Compensation rate: 2/3 rds Average Weekly Wage Three day waiting period Max insured 2014: $1,611.96 per week Administration costs for insured employers 2007*: Insurer underwriting profit: $1,976 million, Administration expense: $5,323 million *IWH Workers' compensation in California and Canada https://www.iwh.on.ca/briefings/comp-california- canada 2010 Purpose and Outline Demographic Effects: Global Changes – Local Impacts Purpose: To persuade you that global demographic changes matter. Outline What we mean by demographics How workforce and population demographics are changing What demographic change means to you and me, our families, our communities– and AASCIF jurisdictions Demographics dem·o·graph·ics (dĕm'ə-grăf'ĭks) noun shortened term for ‘population characteristics’ including race, age, income, educational attainment Healthcare plan membership, multiple-job holding home ownership, employment status, location ...
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AASCIF Convention 2015: Bridging the Future
San Francisco July 6
Terrance J. Bogyo
Independent Researcher | Speaker | Consultant
Introduction: Who is this presenter? Terrance (Terry) J. Bogyo (BSc, MBA, CCRC, RRP)
In de p e n de n t Re s e a rc h e r | S p e a ke r | Con s u l t a n t
Guatemala 13,002,206 Source: www.Mapsofworld.com 2013 data
Population Changes in the US By 2050, out of every 10:
5 Americans will be white 3 Hispanic 1 Black 1 Asian
Jeffrey S. Passel and D’Vera Cohn, US Population Projections, 2005-2050, Pew Research Center February 11, 2008
“It is estimated that by 2050 the United States will be home to more 130 million Hispanics, making it the largest Spanish-speaking nation on the planet.” Peter Reuell, “Watching Spanish grow: FAS-based
observatory to be a center for language study”, Harvard Gazette, June 26, 2013
http://pewhispanic.org/files/reports/85.pdf
America’s Hinge Moment Presidential politics in
2016 will reflect the shifting reality of America 1980 – 80% US
population was white
2060 - <44%
Politico Magazine – Mar 29, 2015: America’s Hinge
Moment by Doug Sosnik (democratic strategist, former advisor to Pres. Bill Clinton)
Average Employment Income by Age Group & Education Level
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
20 to24
25 to29
30 to34
35 to39
40 to44
45 to49
50 to54
55 to59
60 to64
Less than high school
High school
Trades
College
University
Source: Statistics Canada, 2006 Census of Population.
Social Security Disability Insurance “Social Security’s Disability Insurance (DI)
program satisfies neither the Trustees’ long-range test of close actuarial balance nor their short-range test of financial adequacy and faces the most immediate financing shortfall of any of the separate trust funds.” Reason: “…largely reflects the fact that the baby
boomers have been aging through the years of high disability incidence”
Result: 62% Funded Ratio Recommendation: “Lawmakers need to act soon
to avoid automatic reductions in payments to DI beneficiaries in late 2016.”
Your “Demographic” baby boomer - People born between (and including)
1946 and 1964.
generation X - 1963 and 1978 (or 1961 to 1981).
generation Y – aka millennials (Echo Boomers) - 1981 and 1997(ish).
generation Z - loosely defined as those born after 1995 and who are now 20 and young. It’s a big group: two billion worldwide, and one-quarter of the North American population.
Let’s get personal On the top of the page write
The year you were born
Your age on your birthday this year
The age you expect to retire
What do you think your life expectancy was at birth?
If you were 65 today, how many more years do you think you might live?
Do you plan to work after you reach retirement age?
So, How will the US Labor Force change?
Higher rates of participation for women
Lower rates for men
Based on Data from: US Census Bureau, 2012 Statistical Abstract - Employment Projections Table 587- Civilian Labor Force and Participation Rates
Labor Force Participation Rate of Workers 65 and Over 1948-2007 and projections to 2022
http://www.bls.gov/spotlight/2008/older_workers/
Data extracted from "Labor
force projections to 2022: the labor force participation rate
continues to fall," published in
the December 2013 Monthly Labor Review.
35%
40%
45%
50%
55%
60%
65%
Work Status- Percent Full and Part Time - Employed Age 65 and older - Unadjusted Annual – 1977- 2007 and 2009 - 2014
Part-time Full-time
Great R
ecession
– D
ec 200
7 – Ju
ne 20
09
http://www.bls.gov/spotlight/2008/older_workers/ Current Population Survey- Annual – 2009 – 2014 Unadjusted LNU02600097 and LNU02500097 extracted June 15, 2015
Employed age 65 and over Employed Part-time – (thousands) Employed Full time – (thousands)
Series Id: LNU02500097
Not Seasonally Adjusted
Series title: (unadj) Employed, usually work full time - 65 years and over
Labor force status: Employed full time (persons who usually work 35 hours or more)
Type of data: Number in thousands
Age: 65 years and over
Series Id: LNU02600097
Not Seasonally Adjusted
Series title: (unadj) Employed, usually work part time - 65 years and over
Labor force status: Employed part time (persons who usually work less than 35 hours)
Type of data: Number in thousands
Age: 65 years and over
0
50
100
150
200
250
300
350
400
450
Jan
-76
Au
g-7
7
Mar
-79
Oct
-80
May
-82
Dec
-83
Jul-
85
Feb
-87
Sep
-88
Ap
r-9
0
No
v-9
1
Jun
-93
Jan
-95
Au
g-9
6
Mar
-98
Oct
-99
May
-01
Dec
-02
Jul-
04
Feb
-06
Sep
-07
Ap
r-0
9
No
v-10
Jun
-12
Jan
-14
Canada- Employment Age 65 and older Full and Part-time Jan 1976 to May 2015
(thousands)
Canada Full-time employment (4) Both sexes 65 years and over
Canada Part-time employment (5) Both sexes 65 years and over
59% Fulltime
Extracted from Statistics Canada. Table 282-0001 - Labour force survey estimates (LFS), by sex and detailed age group, unadjusted for seasonality, monthly (accessed: June 18, 2015))
New study ranks Alzheimer’s as third-leading cause of death, after heart disease and cancer Washington Post
By Tara Bahrampour, Published: March 5, 2014
Contribution of Alzheimer disease to mortality in the United States
Bryan D. James, PhD, Sue E. Leurgans, PhD, Liesi E. Hebert, ScD, Paul A. Scherr, PhD, ScD, Kristine Yaffe, MD and David A. Bennett, MD
Published online before print March 5, 2014, doi: 10.1212/WNL.0000000000000240
Fact It is astonishing to realize that more than half of all the
human beings who have ever lived beyond the age of 65 are alive today. [prologue xxix]
Aging: Concepts and Controversies 5th Edition
By Harry R. Moody
Published by Pine Forge Press [2006]
ISBN 1412915201, 9781412915205
The Truth — An Inconvenient Inevitability The developed world – not just BC or Canada—is facing
an “Age Tsunami”
a “Demographic Discontinuity”
A “Population Predicament”
Chose your catch phrase… the truth is the same:
A million people worldwide turn 60 every month
over the next 25 years, around 70 million people will retire in developed countries… …and will be replaced by just five million [OECD 2003 Aging Housing and Urban Development]
“70 or bust! Current plans to raise the retirement age are not bold enough”
PUT aside the cruise brochures and let the garden retain that natural look for a few more years. Demography and declining investment returns are conspiring to keep you at your desk far longer than you ever expected.
This painful truth is no longer news in the rich world, and many governments have started to deal with the ageing problem. They have announced increases in the official retirement age that attempt to hold down the costs of state pensions while encouraging workers to stay in their jobs or get on their bikes and look for new ones.
Unfortunately, the boldest plans look inadequate. Older people are going to have to stay economically active longer than governments currently envisage; and that is going to require not just governments, but also employers and workers, to behave differently.
Swedes should be prepared to work until they are 75 and to change careers in the middle of their work life if they are to keep the welfare standards they expect, Swedish Prime Minister Fredrik Reinfeldt said.
Reinfeldt, who leads a centre-right government, also said half of today's children in Sweden can expect to become 100 years old and there has to be a change in the way the Swedes view their work life.
53
So, what will your future hold? When will you Retire? Labour Force Exits vs. Life Expectancy and Official Retirement
15% of Canadians and 13% of Americans plan on never fully retiring
2015
Why will you work?
•Money
(30% US 24% CDN)
•Mental Stimulation
(15% US 18% CDN)
•Keep Physically active
(22%US 21% CDN)
•Connect with others
(7%US 11% CDN)
•Have something
meaningful / valuable to
with your time
(21% US 23% CDN)
Semi-retired by choice…
2015
Gordon Waddell and A Kim Burton. Published by The Stationery Office, 2006.
ISBN 0-11-703694-3.
From the book by Gordon Waddell, A Kim Burton
M Frese & G Mohr 1987, “Prolonged Unemployment And Depression In Older Workers:
A Longitudinal Study Of Intervening Variables.” Soc Sci Med 25: 173-178
Re-employment in older workers can improve physical functioning and mental health.
Haynes SG, McMichael AJ, Tyroler HA. 1978. “Survival After Early
And Normal Retirement.” Journal of Gerontology 33: 269-278.
Mortality after early retirement is higher than would be expected in a corresponding working group: the only significant predictor is pre-retirement health status (i.e. a health selection effect). Taking all the data, no excess mortality was observed after normal retirement.
9
Morris JK, Cook DG, Shaper AG. 1992. “Non-employment And Changes
In Smoking, Drinking, And Body-weight.” BMJ304: 536-541
Men who remained continuously employed had the lowest mortality, even after adjusting for socio-economic variables, manual/non-manual work and health-related behaviour. Even men who retired for reasons other than illness and who appeared to be relatively advantaged and healthy had a significantly increased risk (RR 1.87). The effect was non-specific: the increased risk of mortality from cancer was similar to that from cardiovascular disease.
Continue…
Tsai SP, Wendt JK, Donnelly RP, de Jong G, Ahmed FS. 2005. “Age At Retirement And Long
Term Survival Of An Industrial Population: Prospective Cohort Study.”
BMJ doi: 10.1136/bmj.38586.448704.EO.
After adjusting for socioeconomic status, employees who retired early at 55 had greater mortality than those who retired at 65 — the mortality was about twice as high in the first 10 years after retirement. Early retirees who survived to 65 had higher post-65 mortality than those who had continued working. Mortality was similar in those who retired at 60 and 65. Mortality did not differ for the first 5 years after retirement at 60 compared with continuing work.
What does this mean? It looks like we will see more older people in our society, in
our organizations and in our labour force
What are we going to do to accommodate them?
And with more older workers, what are the costs likely to be?
Would it be fair to hire older workers but limit their rights to health benefits, pension benefits…?
How many “Years of Potential Life” do I have?
75
80
85
90
95
100
105
110
115
120
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
To
tal
Lif
e E
xp
ecta
ncy
Age
Total Life Expectancy by Age - US Mortality Tablesbased on US Social Security Online Life Table 2005
http://www.ssa.gov/OACT/STATS/table4c6.html
Male
Female
1. Determine current age
2. Select Gender
3. Read Total life
Expectancy
Example: Total Life expectancy at age 30 Female: 81.03 (51.03 YPL)
Male: 76.6 (46.6 YPL)
How long was my life expectancy when I was born?
Sources: Adapted from BC Stats, Ministry of Technology, Innovation and Citizens' Services 1921-1946
:Longevity and Historical Life Tables, Dhruva Nagnur, Statistics Canada 1950-2013: BC Stats, Ministry of Technology, Innovation and Citizens' Services
http://www.bcstats.gov.bc.ca/StatisticsBySubject/Demography/VitalStatistics.aspx as accessed Set 2, 2014
50
55
60
65
70
75
80
85
90
1921
1936
1950
1953
1956
1959
196
2
196
5
196
8
1971
1974
1977
198
0
198
3
198
6
198
9
199
2
199
5
199
8
200
1
200
4
200
7
2010
2013
Male
Female
Note: Population data after 1970 adjusted for non-permanent residents and undercount. Figures prepared through the use of single year of age life table.
using deaths provided by Vital Statistics, Ministry of Health, and the average of consecutive years of population provided by Statistics Canada.
Deaths are on a Census Year period basis (July 1, year 1, to June 30, year 2).
Source population is date referenced July 1.
If I were 65 today, how long could I expect live?
10
12
14
16
18
20
22
24
1950
1953
1956
1959
196
2
196
5
196
8
1971
1974
1977
198
0
198
3
198
6
198
9
199
2
199
5
199
8
200
1
200
4
200
7
2010
2013
Male
Female
Source: Data from BC Stats, Ministry of Technology, Innovation and Citizens' Services
From pre-history to pre-modern times …and in some modern-day tribes…
Some Modern Pyramids
One child policy starts 1979
Cultural Revolution/Gang of Four 1966-76
How are projections done? Cohort Component methods are commonly used (among
others) Start with the male/female population by age (usually five year
groups) Look at the age-specific survival rates by gender and age category Apply the fertility rates for the women and the gender ratios at
birth to get the number of new males and females to add Add the expected births for each gender to the top of the list, move
the survivors down one age category and repeat
Variations include ethnicity, religion, region, adjustments for immigration, emigration, (and in-migration, out-migration) on a state or provincial basis), parity rates…