United Kingdom: New Surveys, Resources for Working Retired

Research conducted by Heyday, a new retirement website being launched by Age Concern, shows that Baby Boomers in Great Britain are intent on reinventing retirement with many people no longer following a traditional pattern of working up until State Pension Age and then retiring full time. Among Heyday's findings: 58% of working people in their 50's and 60's want to work in some capacity beyond retirement and almost 10% say they won’t retire at all, but 64% say it is impossible to get a new job within 10 years of retirement.

Heyday is also launching "Have Your Say"--a new survey--to find out the hopes and fears of people approaching or in early retirement. "Heyday is inviting over 10 million people to have their say on all the burning issues--work, ageism, pensions and more. This feedback will not only shape Heyday as an organisation, but will create a powerful voice on what Britons want out of modern retirement."

Source: Age Concern News Release (May 30, 2006)

Singapore: Tripartite Alliance for Fair Employment Practices.Established

Following the recommendations of the Tripartite Committee on Employability of Older Workers, the Singapore government has formed a Tripartite Alliance for Fair Employment Practices (TAFEP) to shift mindsets among employers, employees and the general public towards fair and responsible employment practices for all workers.

Co-chaired by Mr Bob Tan, Vice President, Singapore National Employers Federation (SNEF) / Council Member, Singapore Business Federation (SBF), and Mdm Halimah Yacob, Assistant Secretary-General, National Trades Union Congress (NTUC), the Alliance held its first meeting on May 22 and adopted a plan of action. Among other things, it intends to formulate guidelines for fair employment practices towards workers of all ages, genders, races and religion, and initiate a fair employment movement through national and sectoral programmes to facilitate broad and effective adoption of fair employment practices.

Source: Ministry of Manpower Press Release (May 29, 2006)

New Zealand: Flexible Working Options Attract Older Workers

According to the Work and Age Report 2006, a recent survey conducted by the New Zealand EEO Trust, employers would be better placed to retain the skills of older workers if they offered quality part-time work and flexible working hours. With more than 6,400 people responding (most over 45 years old, but 24% younger than 45) to questions about what workplace conditions would encourage them to continue working past their expected retirement date, quality part-time work and flexible working hours were the most popular options.

Reliability is the number one quality older people bring to the workplaces according to survey respondents. In addition, most agreed that older people provide good customer service and communication skills, are committed to their careers, have skills in training people, show initiative and are able to create a good atmosphere in the workplace. However, about one in three respondents said they had experienced difficulties at work due to people being different ages, and a third said they had experienced discrimination at work due to their age.

Source: Equal Employment Opportunities Trust Media Release (May 26, 2006)

Commentary: Waste of Mandatory Retirement

Michael Willard, writing int The Ukranian Observer, chastises corporations as being rather myopic when it comes to judging value of an employee: "They often look at how expensive the person is, and feel sure a younger firebrand is up to the task of the job." Even in a country, such as Ukraine, where retiring at 60 is not unusual but mortality charts, particularly for males, extend just a few clicks beyond that age, Willard findds "many older Ukrainians not wishing to retire at 60 or 65."

Willard then went on to quote extensively from a speech given by Lord John Browne, CEO of British Petroleum, railing against mandatory retirement. Browne argues that (1) countries need people to work longer and need to ensure that the balance between those in work and those not working doesn't move to the point where the burden of taxation and transfer payments is intolerable, and uncompetitive, (2) mandatory retirement at a fixed age is inappropriate since more than 70% of the European economy is now based on services, rather than manufacturing, and (3) in key disciplines such as engineering, a disproportionate share of BP's workforce is over 45, and indeed over 50. More importantly, however, Browne argues that it "is the need for a civilized society to overcome prejudice" and that "too many people seem to think that it is still acceptable to say you've reached the age of 60: We don't want you any more."

Source: The Ukranian Observer "THE WORKPLACE: The Waste of It All" (May 2006)

United Kingdom: Government White Paper on Pension Reform, Raising Retirement Age

The U.K. government has published its response to the report of the Pensions Commission in the form of a White Paper--"Security in retirement: towards a new pensions system", which sets out proposed legislation. Among other things, if passed into law, the state pension age would gradually rise to 68 by 2044. Other highlights include:

• During the next parliament, the state pension will be made more generous, and future increases will be tied to earnings rather than prices
• The number of years it takes for people to qualify for a full basic state pension will be cut to just 30
• From 2012, people will be automatically enrolled into a new, low-cost national savings scheme, albeit with the chance to opt out if it is not suitable for them.

The proposed changes will not affect anyone currently over the age of 47.

In addition to the complete White Paper, online resources include an Executive Summary and Secretary of State for Work and Pensions, John Hutton’s Oral Statement to the House of Commons.

Source: Department for Work and Pensions Press Release (May 25, 2006)

Anti-Aging Developments: The Social Burden of Longer Lives

In the first of a three-part series on the science of anti-aging, Ker Than reports for Fox News that "while scientists go back and forth on the feasibility of slowing, halting or even reversing the aging process, ethicists and policymakers have quietly been engaged in a separate debate about whether it is wise to actually do so."

When it comes to the workplace, living longer will mean more time spent working: "Careers will necessarily become longer, and the retirement age will have to be pushed back, not only so individuals can support themselves, but to avoid overtaxing a nation's social security system." In addition, the experts worry that competition for jobs would become fierce and workplace mobility (or lack thereof) could make it harder for younger workers to get ahead.

Source: FOXNews.com "Toward Immortality: The Social Burden of Longer Lives" (May 23, 2006)

House Committee Approves Reauthorization of Older Americans Act

Without opposition, the U.S. House Committee on Education & the Workforce has approved the Senior Independence Act (H.R. 5293), which reauthorizes and strengthens services offered under the Older Americans Act, the chief federal law governing the organization and delivery of a number of social services for older Americans. According to a summary of the bill, the legislation would, among other things safeguard employment-based training for older Americans by:

• Maintaining the program’s dual purpose of community service and employment-based job training;
  
• Allowing public or private nonprofit agencies and organizations to compete for national grants, which is consistent with current law;
  
• Retaining the age of 55 for program eligibility (consistent with current law), but requiring grantees to first serve those with the greatest need, including individuals over the age of 65.
  
• Strengthening opportunities for business sector partnerships
• Requiring grantees to have an average time limit for participation not to exceed 2 years and limiting individual participation to not more than 4 years

Source: U.S. House Committee on Education & the Workforce Press Release (May 17, 2006)

Reactions:
While commending the House for its bipartisan agreement to reauthorize the Act, the AARP is concerned that "the participant tenure limits in this bill for the Senior Community Service Employment Program (SCSEP) will disproportionately impact those oldest and hardest to serve. These vulnerable, low-income older workers, representing some 30 percent to 50 percent of the program's current participants (18,000 to 25,000 individuals) will be the first affected by these tenure limits." Press Release, May 18, 2006

Upcoming Aging Workforce Conferences Announced

Two organizations focusing on the aging workforce have announced conferences devoted to these issues.

First, Boston College Center on Aging & Work has announced its inaugural conference on "Aging of the Workforce: Competitive Advantages or Vulnerabilities" for May 31-June 2, 2006 , in Newport, RI.

A timely opportunity for human resource professionals and other corporate executives to explore ways to link worker talent to strategic business goals. The meeting will put aging issues in broader business contexts and provide a chance to apply lessons-learned to your company. Leaders from business, universities, and the media will share their views with participants. Time allotted forquestion-and-answer and active participation will enable you to hear from peers, test your ideas and evaluate your own experiences with engaging the talent of older workers. The meeting is free but open by invitation only; reservations
are required in advance.

Second, the University of Pittsburgh's Institute of Politics is presenting "The Aging Workforce: Challenge or Opportunity?" June 23, 2006 in Pittsburgh, PA.

This event will bring national and regional leaders together to consider the implications of southwest Pennsylvania's aging workforce. Regional research indicates that the mining, manufacturing, transportation and utility industries are disproportionately mature and that few companies in these sectors have fully considered the implications of their workforce demographics. For additional information please contact Vanessa Lund at the Institute of Politics.

Source: Aging Workforce News Conferences and Events Regularly Updated

Connecticut: Repeal of Social Security Offset from Workers Comp Advances

As of May 17, the legislation (Public Act 06-84) in Connecticut to repeal the social security offset from workers' compensation benefits had passed both houses and had been trasmitted to the Secretary of State. See eaelier Aging Workforce News article. Opponents of the legislation have stated that "the cost of this proposal (SB-25) to Connecticut employers is expected to be $8 million in the first year alone, according to a recent impact statement issued by the National Council on Compensation Insurance (NCCI). That increased cost would continue in future years."

Source: Senate Bill 25 Legislative History

Retirement Study: Americans and Their Employers Don’t See Eye to Eye

In releasing the 2006 Merrill Lynch New Retirement Study, Merrill Lynch reports a "startling disconnect" between how Americans and their employers view retirement: While many people are actually working in retirement or have taken steps for a new retirement career, most employers are not on track to prepare for this phenomenon.

“Not only is the new model of retirement here, but it transcends many different age groups,” said Michael Falcon, head of the Retirement Group at Merrill Lynch. “Multiple generations report cycling in and out of work and pursuing a new career in later life as the retirement ideal. This important study shows us that companies need to be aware of this new concept of retirement in order to prepare for the new work force realities.”

According to the survey--conducted for Merrill Lynch by Harris Interactive, 71% of those surveyed want to work in some capacity in retirement. The most cited reason for working during retirement was to stay mentally and physically active, and most would like to change their line of work and cycle between periods of work and leisure. On the other hand, while companies are not completely in the dark and recognize the shift toward the desire to work in retirement, they are more likely to assume that employees want to work a regular part-time schedule than to cycle between periods of work and leisure and have not responded to individuals’ overwhelming desire to pursue a completely new line of work in their “new retirement.”

Source: Merrll Lynch News Release (May 18, 2006)

Europe: Are EU Measures Aimed at Increasing Employment Older Workers Delivering?

Anne-Sophie Parent, director of AGE, writes that while--following the adoption of the EU framework directive 2000/78, at which policy makers became aware of the complex issue of age discrimination--ambitious targets were set in the framework of the Lisbon strategy and all member states decided to do something to keep workers in the workforce for longer, this approach has usually not delivered the expected results. For example, draft legislation in Germany, which would have allowed employers to hire workers aged over 52 under limited contracts without any restriction, was deemed to constitute age discrimination and forbidden by the European courts.

In other countries, active labour market policies targeting the over 50s succeeded in increasing the employment rate of older workers: Finland, for example, whose active ageing policy is delivering very significant outcomes.

So, what lessons can we draw from the limited experience gathered so far on measures to promote the employability of older workers?

We feel that labour legislation should aim at compensating the age factor in such a way that it becomes neutral for both employers and workers.

This means creating incentives for both employers and workers without being detrimental.

Parent beleives that "an age-friendly culture needs to be promoted both inside and outside the labour market. Awareness needs to be raised on the value of a diverse workforce which reflects the diversity of today’s EU population."

Source: "EU Employment Week: Reflecting Europe’s diversity" EUPolitix.com (May 17, 2006)

Worries that Aging Workers Will Bring Brain Drain to Indiana

According to a report, whose findings will be shared at the “Managing the 21st Century Workplace: Value and Impact of Older Workers” conference, nearly 29% of Indiana residents will be age 55 or older by 2030, versus 22.4% in 2005. Thus, Chris O'Malley reports, "employers and economic development leaders, already lamenting that 36 percent of Indiana college graduates leave the state after graduation, may now have another 'brain drain' to worry about."

While some economists say fears of a labor shortage are unfounded because of expected productivity gains and other offsetting factors, Barry Spiker, a senior fellow at the University of Indianapolis’ Center for Aging & Community, warned: “We’re facing a crisis that’s just never been seen before in this country, ever.”

The conference will share new statewide data, including the findings of “Gray Matters: Opportunities and Challenges for Indiana’s Aging Workforce,” a report written by former Indiana Economic Development Council President Graham Toft and Nadine Jeserich, now both working at local economic development firm Thomas P. Miller & Associates. According to the report, as older workers leave the work force, Indiana won’t see as much of a brain drain as many other states, however, since only 11% of the state's population 55 or older holds a bachelor’s degree or higher, placing it 46th among all states. In addition, only 16% of that population are in high-skill occupations—placing Indiana 42nd. Finally, Indiana ranks dead last in coaxing older workers back to college.

Source: "Employers brace for age shift" Indianapolis Business Journal (May 15-21, 2006)

Hewitt Study Finds Company Efforts Positively Impact U.S. Employees’ 401(k) Saving Habits

Hewitt Associates has released its report “How Well Are Employees Saving and Investing in 401(k) Plans, 2006 Hewitt Universe Benchmarks,” which finds that efforts by companies to help U.S. employees save for retirement--including putting the 401(k) plan on autopilot, simplifying plan choices and targeting communication--have resulted in improvements in employees’ retirement saving and investing behaviors. Nevertheless, the report also discloses that nearly half of employees examined still failed to participate in their 401(k) plan or failed to contribute enough to obtain the full company match.

Source: Press Release Hewitt Associates (May 16, 2006)

McKinsey Survey Finds U.S. Workers Retiring Early

Despite growing financial pressure to stay in the workforce, a report by McKinsey & Co., based on a national survey of 3,086 people, shows that American workers are far more likely to be forced into an early retirement than many expect. Writing for the LA Times, Jonathan Peterson reports that 40% of retired workers left their jobs sooner than they had planned, usually because of health problems or the loss of employment, and that while 45% of people currently employed planned to keep working past age 65, only 13% of polled retirees had done so.

McKinsey's data do not mean that the trend toward a later retirement age is changing, experts say. But the facts counsel caution to those who discount the challenges of working into their late 60s or beyond, and they suggest that many who assume they will work late in life may be mistaken.

Source: "Many Forced to Retire Early" Los Angeles Times (May 15, 2006)

Hong Kong: Low Retirement Age Threatening Brain Drain

Doug Crets writes that attendees at an HSBC retirement forum were told by a researcher on aging and a legislator that "Hong Kong's low mandatory retirement age--coupled with its rapidly aging population and one of the world's lowest birth rates--will lead to a 'brain drain' unless the government and individuals plan for the future." However, he also notes that a recent survey on aging shows that most Hong Kong people believe the government should enforce mandatory "additional private savings" and increase the retirement age.

Source: "Aging expert warns of brain drain" The Standard (May 16, 2006)

The End of Retirement

The U.S. Department of Labor's Monthly Review has published an article by Teresa Ghilarducci, a teacher of economics at Notre Dame University and a visiting professor at the New School for Social Research, about the signs of the end of retirement all around. She argues that "the changes in the retirement future of Americans stem from the decline of union contracts, a dramatic shift in presidential and congressional attitudes about government responsibility for social insurance, and the substitution of defined contribution or 401(k)-type accounts for traditional defined benefit pensions."

Twenty years of experience with 401(k) plans reveal that workers will never be able to accumulate enough assets in individual accounts and choose payout options that will provide a steady stream of income for life after retirement. This means that Americans will turn to the option that American adults have always relied on—contingent, low-paying jobs—and will lose one of the few remaining accomplishments of the American working class, retirement.

However, given that defined contribution plans are here to stay, she believes taht there is barely a regulatory framework in place to protect the public interest. She suggests that sensible protections that already govern the investment behavior of defined benefit plan fiduciaries could be a good place to start, including limiting the percent of a portfolio that is allowed to be in the employee’s company’s stock, banning lump sum payments, and mandating worker representation on pension boards.

Source: "The End of Retirement" Monthly Review (May 2006)

Working Longer: Does it Help People Be Healthier, Happier?

Esteban Calvo, a graduate student in Sociology at Boston College and a graduate research assistant at the Center for Retirement Research at Boston College, has published a paper--"Does Working Longer Make People Healthier and Happier?"--that suggests that longer working lives will help most people maintain their overall well-being. The paper addresses the impact of late-life paid work on physical and psychological well-being, and it includes a review of the literature on work at older ages and elderly well-being.

While working longer seems beneficial for most people, it will likely have negative consequences for some. The type of job seems to be a critical factor. Undesirable jobs can wash out the potential favorable effects of work. Another critical factor is the opportunity to continue working. Older workers may be willing to prolong paid work, but, in order to find a job, they need to be able to work and have a real demand for their labor.

Calvo also suggests some areas for future research. In particular, since an increase in the early retirement age reduces the ability of people to voluntarily decide their labor force participation, he wonders whether less control in the work/retirement decision could have an adverse impact on the well-being of older individuals. Also, he notes that variations in the benefits of work as people move through their 60s should be examined--even though work at older ages seems beneficial for many, the benefits may decrease, or stop increasing, after a certain age or amount of time worked per year.

Source: Issues in Brief No. 2 Boston College Center for Retirement Research (February 2006)

United Kingdom: Age Positive Week

Employers across Great Britain were called to join the fight to tackle ageism at work during Age Positive Week (May 8-12). The Week's goal was to challenge ageist stereotypes at work and promote positive examples of employers and employees defying ageism.

Source: News Release Age Positive (May 6, 2006)

Survey: Firms Ready to Respond to Challenge of Aging Workforce

According to the latest Leadership Pulse™ survey from Dr. Theresa M. Welbourne of eePulse, Inc. and the Ross School of Business, University of Michigan, usinesses are ready to respond to the 17% of the U.S. workforce that will be 55 and older by 2010. The study was designed to understand the current effects of the aging workforce (AWF) and readiness to address future AWF issues.

Specifically, of the 369 general managers to C-level executives surveyed, 62% are ready to retain older workers, 49% are ready to recruit older workers, 43% agree that the AWF currently affects their organization’s culture, 42% agree that the AWF currently affects the quality of talent in their organization, and 41% agree that the AWF currently affects their ability to compete in their particular industry.

A powerpoint presentation of preliminary results is also available.

Source: News Release ClickPress (May 8, 2006)

Commentary: Companies Must Look Across Generations and Borders for Talent

Building on the results of the Human Capital Institute's survey of HR executives, its executive director Allan Schweyer writes that "the winners of the war on talent will welcome talent of all ages and varieties, and they will build their networks into the farthest reaches of the planet." Given the widespread shortages of talent that are already occurring across the country, he finds a strange paradox in the survey findings taht While more than half of the executives agreed that the aging workforce is an issue that must be dealt with because it will lead to a workforce shortage, less than one-quarter said that the aging of their workforce is an issue that is strategically very important to them.

It is imperative that executives and senior managers, from small, mid-size and large firms, understand the implications of our aging and diversifying domestic talent pools as well as the dynamics of a global workforce that is expanding at lightning speed. For human resources leaders, knowledge of best practices in retaining older workers is key. For recruiters, knowledge of top sources for recruiting the diverse workforce and of the factors that appeal to diverse recruits is critical.

Source: "Build Talent Pipelines Across Generations, Cultures and Borders" Inc.com (May 2006)

Reverse Job Fairs for Older Workers

A “reverse” job fair has been held at the Metro Career Center in San Diego, at which job seekers 55 and older stood by while employers approached them to check job qualifications and to talk. The event was put on by Community Options, a federally funded group that has a program to help low-income older people with job training and placement, and by the Oasis Institute, a private nonprofit organization partially funded by a grant from AT&T that helps older individuals with career and education opportunities.

According to an article by Michael Kinsman, Community Options and Oasis teamed up to coach the workers on job-search skills and some personal computer training over a four-month period so they would qualify for a variety of jobs. Charlotte Tenney, a Community Options senior employment counselor said “We thought it might make a difference to teach job candidates how to sell themselves to the employer.” Tenney came up with the idea of having employers approach individuals: “We really wanted to try something different.”

Source:"At this job fair, older workers waited for employers to visit" San Diego Union-Tribune (May 7, 2006)

Removing Obstacles for Older People Looking for Work

Randi F. Marshall, writing for Newsday, tells stories of both why finding work is tougher for older people and what employers can gain by clearing away the obstacles. Despite the efforts of many older people seeking work to e-mail resumes and learn new skills, Marshall says that "some mature workers have come across roadblocks that younger job-seekers haven't encountered. Employers, said some experts, look only at the immediate price tag--in salary, medical benefits, pensions and other areas--and not at the benefits of hiring the over-50 crowd."

Perhaps the most difficult part of the process is the interview. It's hard for older job- seekers to sit across from an interviewer who is 20 years younger than they are, or to look around at a roomful of job-seekers who are just out of college--especially when their last interview may have been more than 20 years ago.

However, one staffing firm quoted by Marshall, advises that interviews should focus on what a worker can bring to the company and the worker's knowledge about that company--not the worker's previous experience.

Source: "A job in itself" Newsday (May 6, 2006)

Large U.S. Businesses Continue To Shift Ffrom Traditional Pensions

Watson Wyatt Worldwide has reported new analysis showing the largest U.S. companies continued to shift from traditional pensions to 401(k) plans in 2005. Specifically, it found that only 37% of Fortune 100 companies offered a traditional pension plan to new hires in 2005, down from 42% in 2004, 50% in 2002, and 89% in 1985. At the same time, the percentage of companies offering workers only a 401(k) or other type of defined contribution plan increased to 36% in 2005, up from 25% in 2004 and 17% in 2002.

In light of these results, Watson Wyatt Worldwide urges Congress to act on long-standing funding and regulatory issues affecting pensions. At the same time, the firm’s experts say employers should get a true reading of their plans’ cost structure and of related workforce management issues before making plan changes.

Source: News Release Watson Wyatt (May 4, 2006)

Case Study: Shadowing Program for Boomer Succession Plans

According to an article written by Barbara Rose of the Chicago Tribune, International Truck and Engine Corp. started a program of assigning younger employees to "shadow" veterans before the older workers retire in 2004 after a report to the company's board showed that half its 600 managers and executives would be eligible for retirement within five years. As Dan Ustian, chairman, the company's president and chief executive officer, said: "All that knowledge is really important--the culture, the relationships with customers. It’s vital we get a head start."

Among other things, bosses at International were coached on how to initiate talks with retirement-eligible employees without running afoul of age discrimination laws. They asked questions such as, "Where do you see yourself in five years?" and, "Are there other positions you'd consider?" "Many of the conversations are about trying to get them to stay and groom a successor," said Greg Elliott, vice president for corporate human resources and administration. Then, the company would work with the retiring employee; for example, with one senior executive, his package, which included a retention bonus, kept him on 12 months, long enough to identify a successor and complete a six-month process of job shadowing.

Source: "Preparing for the baby boomer brain drain" Portsmouth Herald (May 3, 2006)

Canada: Pension Crisis Deepens

According to the 3rd annual pension risk survey by The Conference Board of Canada and Watson Wyatt Worldwide, 61% of Chief Financial Officers (CFOs) say the pension crisis in Canada is widespread and likely to persist beyond the next few years. In addition, only 19% said the crisis is widespread but unlikely to become permanent--down from 23% in 2005 and 39% in 2004, and just 15% said the pension situation is isolated to relatively few organizations.

Source: News Release Conference Board of Canada (May 2, 2006)

Japan: Older Workers Retunring to Labor Force

David Pilling, writing in the Financial Times, reports that people over 60 are being drawn back to the workforce as it rises for the first time in eight years. "The willingness of those who left the jobs market to re-enter also shows the mechanisms by which the labour market might respond to the challenges of an ageing society, which is shrinking the size of the traditional workforce."

According to official figures, by last year, there were 9.67m people aged 60 or over either working or looking for work, a 450,000 increase from five years earlier. He also writes that officials from The Bank of Japan say every business sector is now suffering from labour shortages, which could push up wages and lead to further hiring of people who had drifted out of the labour market.

Source: "Japan sees first rise in workforce in 8 years" Financial Times (May 1, 2006)