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October 14, 2021

Employers continue to trim retirement benefits

A lot of older adults assume their retirement benefits, including health and dental coverage, will be available as long as they live.

And they’d be wrong.

Not that long ago, both Bell Canada and Sears eliminated most supplemental benefits for future retirees, joining a growing list of companies putting a lid on soaring retirement obligations.

Right now, a Delaware bankruptcy judge is weighing whether auto parts supplier Visteon Corp. can terminate retiree health care and life insurance benefits for thousands of current and former workers.

The unkindest cut of all: Molson breweries recently announced that it would be phasing out its longstanding policy of providing free beer to retirees. Next year, their allotment will be a dozen bottles a month, down from six dozen a month. What’s worse, in five years, the taps will be turned off completely. 

According to a Watson Wyatt survey of 500 major Canadian employers, fewer than half of employers now provide medical coverage for their retirees. And those that do are scrambling to scale back their plans or cap annual payments.

The potential cost to retirees of these lost benefits? Well, a 65-year-old man retiring this year with subsidized retiree health benefits from a former employer would still need to put aside an additional $68,000 to cover further expenses in retirement, says the Employee Benefit Research Institute.

And that’s providing he’s comfortable with only a 50 per cent chance of having enough money to look after things, EBRI notes.

More importantly, retirees who aren’t subsidized would need to save at least twice that.

Tell us: Have you noticed any benefits disappearing where you work?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...