Rise in Age Bias Suits Linked to Rise in Older Workers

Writing in the National Law Journal, Tresa Baldas reports that employment attorneys say the surge in age bias lawsuits is mainly due to the fact that a large part of the work force is getting older, staying healthier, and choosing to work longer. For example, Gary Phelan of Outten & Golden reports that his firm has seen a 50% increase in age bias claims in the last year and claims that employers still aren't taking age discrimination seriously.

Employers have been put on the alert, said attorney Zachary Hummel of Bryan Cave's New York office, who represents employers in labor matters.

"As our work force ages--and I have many clients watching that happen within their work force--practitioners are anticipating what certainly will come, and that is more age-based suits," Hummel said. "And those of us that do a lot of advising work with clients ... we certainly are concerned about that because age discrimination claims are difficult cases to defend."

Source: National Law Journal "Age Bias Suits on the Rise With Older Employees Working Longer" (March 16, 2007)

Conference Board Report Suggests that Phased Retirement is Becoming a More Viable Option

A report released by The Conference Board suggests that recent U.S. legislation means that more companies will be able to use phased retirement to retain valuable skills and knowledge while providing mature workers with an alternative to the all-or-nothing approach to retirement. While the IRS has yet to issue regulations under the Pension Protection Act of 2006, the Act opens up new options for companies that sponsor defined-retirement benefit plans, lifting restrictions that forbid employers from paying retirement benefits until an employee had terminated employment or had reached the plan's normal retirement age.

According to Anna M. Rappaport and Mary B. Young, the authors of "Phased Retirement after the Pension Protection Act", employers should first define the talent challenges that phased retirement might help solve and then should evaluate which of the many options for phased retirement would be most effective. Figuring out the compensation and benefits should be the final step.

Phased retirement can be any work arrangement that falls somewhere in between full-time retirement and working full-time. Formal phased retirement is still relatively rare, partly because employers are skittish about running afoul of pension laws, and partly because companies are reluctant to include all of their mature staff in a phased retirement situation.

While the report is available for purchase, the Conference Board press release provides further detail into the kind of decision-making process a company should adopt when considering the possibilities of implementing phased retirement.

Source: Conference Board Press Release (March 28, 2007)

Norway: Pension Reform Agreement Supports Older Workers

Norway's center-left government and opposition parties reached a compromise on pension reforms that are intended to encourage older workers to stay in employment longer and to make pensions fair and sustainable. Among other things, future pension options will include retirement at age 62, but there are strong incentives to continue until age 70. According to an article by Aftenposten's Norwegian reporter Sigurd Bjørnestad, the agreement keeps Prime Minister Jens Stoltenberg's pension reform promise to give everyone more was more or less intact.

The new system is complex, with many new pros and cons, with the clearest perhaps being the ability to choose between a longer retirement on less of a pension, and working long to guarantee a more comfortable, though shorter, retirement. A key change is the ability to work as much as one likes after retirement without losing pension benefits.

Source: Aftenposten "Pension reform agreed" (March 22, 2007)

Other Sources: Ministry of Finance and Ministry of Labour and Social Inclusion The Pension Reform

Global Aging and Retirement: AARP Releases Country Surveys of Opinon Leaders

In conjunction with a conference on "Reinventing Retirement Asia: Enhancing The Opportunities of Aging" held in Tokyo March 15-16, AARP released a survey of opinion leaders in Asia and Oceania, which reveals that most believe their countries are ill prepared to deal with the challenges of an aging population. Although the survey report covers several aspects of aging and society, two core focuses were on older workers and retirement.

AARP's report--"Aging in Asia and Oceania: AARP Multinational Survey of Opinion Leaders 2006"--was prepared by Princeton Survey Research Associates International thrugh a survey of opinion leaders in the United States and in seven countries in Asia and Oceania. The survey was designed to increase AARP’s knowledge of aging issues and attitudes in key Asian markets and to compare attitudes and policies towards aging in the US to attitudes and policies in Asian and Oceanian societies.

According to the overall summary, opinion leaders vary as to the age at which a worker becomes an "older" worker:

Averaging 60 years of age among all opinion leaders interviewed, the average age at which opinion leaders would consider someone an older worker varies somewhat from country to country, ranging from a high of age 66 in Japan to a low of age 55 in Australia. Half of opinion leaders say that the transition to becoming an older worker occurs some time between the ages of 60 and 69.

Other key findings show that opinion leaders perceive older workers as wise, respected, and productive, but that "businesses do not see older people as a
potential source of productive labor and employers are not well prepared for a future workforce comprised of more older workers." Opinion leaders also say that it is a responsibility to society to address older worker issues, older workers should be accommodated, the mid-60's is an appropriate time to retire, and that there should not be mandatory retirement.

In addition to the full report, AARP has issued specific country reports for the United States and for these Asian or Oceanian countries:

• Australia
• China
• India
• Japan
• New Zealand
• Singapore
• South Korea

Source: AARP News Release (March 14, 2007)

Oasis Institute Receives Grant To Increase Technology Skills of Older Workers

The AT&T Foundation has made a $1 million AT&T AccessAll grant to the OASIS Institute to expand the Institute's "Excellence in Technology Partnership" to help mature adults in more communities develop the skills, resources and confidence to use technology effectively in their personal lives and in the workforce. Through OASIS classes, individuals learn how to use e-mail and word processing, create spreadsheets, conduct Internet searches, and protect their privacy and security online.

When Lynn Schanz decided to go back to work at age 55, she realized pretty quickly that she needed computer skills to succeed. Through her local OASIS center in Indianapolis, she signed up for a few computer skills classes such as an introduction to the Internet and using Microsoft Word. Developing basic technology skills gave her the confidence to apply for job opportunities, and her determination paid off when she landed a job with an eye therapist's office.

Source: Oasis Institute News Release (March 14, 2007)

New Zealand: Survey Shows Surge in Number of Older People in Paid Work

According to a new analysis published by the New Zealand Department of Labour, more older New Zealand workers are staying on the job, with New Zealand recording one of the highest workforce participation rates in the OECD for the 50-64 year age group. The report--"Older People in Work: Key Trends and Patterns 1991-2005"--shows a surge in the number of older people in paid work, with 77% of 50-64 year olds working in 2005, compared with just 57% in 1991. By comparison, Australia’s participation rate is around 10 percentage points lower, according to Department of Labour Group Manager for Workforce Policy Lesley Haines.

Haines particularly noted that the growth of participation by older women--from about 45% to about 70%. “Factors contributing to this growth include the fact that women are pursing careers across their lifetime, technological changes to the nature of work and ongoing skills shortages. Raising the age eligibility for superannuation has also played an important part."

She also pointed to additional research released by the Department of Labour--"45 plus: Choices in the Labour Market"--which provides an insight into drivers and barriers to paid work for people over the age of 45.

Source: New Zealand Department of Labour News Release (March 6, 2007)

The report is also available in PDF or Word formats.

United States: Survey Shows Many Employees in Small Businesses Staying on Past 65

According to a survey of small businesses, almost a fifth report that their older workers are staying on past the usual retirement age of 65. More than a third reported employees are still working because they can't afford to retire, while twice that many said employees were staying past 65 because they liked working or enjoyed the extra income.

The survey--"Older and Wiser: As the Work Force Ages, Small Businesses Change, Too"--was conducted by the National Association of Professional Employer Organizations. Among other things, the survey found that almost 16% of the small businesses said 5% or more of their employees are between 60 and 64, a jump from five years ago, when it was 9%.

Source: National Association of Professional Employer Organizations News Release (March 15, 2007)

Europe: Mature@eu Recuriting Project Opens Website

The European Union Leonardo Da Vinci project website mature@eu is up and running. The project is coordinated by the Vienna based ZSI (Center for Social Innovation) and aims at supporting HR Managers to recruit and retain older employees through developing effective age neutral personnel policies.

The website holds a lot of useful information and it will be constantly updated as the project "matures". The link-list refers to a broad range of organisations in several countries, who have been engaged in supporting older employees and have valuable information and examples of good practice. In addition, a toolbox will be available, which will facilitate HR and employee representatives to promote a change in attitudes and practice towards the recruitment of older professionals and the perception of age stereotypes.

Source: Union Network Internationaal News Release (March 13, 2007)

Virginia: Study Finds Rural Communities Short of Younger Workers

According to 2006 population estimates by age and gender developed by the Demographics and Workforce section of the University of Virginia’s Weldon Cooper Center for Public Service, younger Virginians (18-24) are concentrated in or near college or university towns and, after college graduation, in localities--typically cities--with the largest range of employment opportunities. Accordingly, workforce development strategies targeted to available human resources will be required to meet the needs of employers in rural areas.

Qian Cai, director of the Demographics and Workforce Section, who prepared the estimates, notes that "[w]hile small and rural communities may offer certain dimensions of a high quality of life, the absence of employment opportunities presents significant disadvantages to these communities in attracting younger workers.” At the other end of the workforce, the percentage of Virginians at pre-retirement age (55-64) continues to grow--now 11% of the current population, compared to less than 9% six years ago.

“Communities facing the largest retirement challenge already tend to have a higher proportion of elderly citizens,” says Cai, “because the younger population leaves in search of work, the older resident population ages in place, and many who left when young tend to move back for retirement.” In Mathews County, for example, 11 out of every 100 people aged 65-69 moved in from elsewhere (as compared to the state average of three out of 100).

Source: University of Virginia News Release (March 14, 2007)

Survey: U.S. Companies Not Responding to Changing Demographics of Aging Workforce

A survey released by Boston College's Center on Aging and Work/Workplace Flexibility , found that many U.S. businesses are unprepared for changing workforce demographics. Specifically, the "National Study of Business Strategy and Workforce Development" shows that more than a quarter of U.S. businesses have failed to plan for the effects of the aging American workforce.

"Even though organizations know that the workforce is aging and understand that their own workers are looking at retirement, many are not making plans for how business will adjust to these changes," said Marcie Pitt-Catsouphes, co-director of the Boston College Center on Aging and Work.

"Companies that do not plan for this aging workforce may find themselves suddenly faced with a loss of labor, experience and expertise that will be difficult to offset, given the relatively small pool of new workers and the competition for new talent likely to result from so many companies facing the same problem," said Mick Smyer, co-director of the Center.

The survey focused on four questions: (1) Are employers assessing how the aging of the workforce might affect their organizations? (2) Do employers see the aging of the workforce as a vulnerability or a competitive advantage? (3) How are employers responding? (4) What factors could affect employer response? For each question, the survey reports on the results, but also offers up concrete advice to employers under the rubric of "Considerations for Employers."

Source: Boston College Center on Aging and Work/Workplace Flexibility Press Release (March 13, 2007)

Canada: Expert Panel Releases Discussion Paper on Older Worker Challenges and Policy Issues

Following up on the appointment of the Expert Panel on Older Workers, Erminie Cohen, Chair of the Panel, launched a public discussion paper, which highlights the main issues older workers face in the
labour market and will serve as a vehicle for the Panel's discussions and consultations. The Panel encourages people to read the document and send in written submissions; guidelines for submissions are available on the Panel's website.

The purpose of the paper--"Older Workers: Challenges and Policy Issues"--"is to provide Canadians with an opportunity to consider the labour market issues affecting older workers today and in generations to come. It is designed to support a dialogue with the provinces and territories, as well as with a broad range of stakeholders and academics. In so doing, it provides details on labour market pressures, and on this group of workers, particularly displaced older workers, and asks questions of which the answers could help frame the development of future policy initiatives."

Source: Expert Panel on Older Workers Press Release (March 9, 2007)

Canada: Central Bank Governor Urges Flexibility on Employers for Retaining Older Workers

David Dodge, Governor of the Bank of Canada, speaking to the Calgary Chamber of Commerce urged flexibility on employers in light of changing demographics that mean that there will be fewer and fewer young people in the labour pool to draw upon. Specifically, employers must learn to concentrate on making the most of experienced and trained workers and remove any barriers to their continued participation.

This means that we, as employers, have to be more flexible in setting up work schedules. It means that we, as employers, must look at the redesign of pension plans. It also means that we, as employers, must put more effort into upgrading skills and increasing our openness to hiring mature workers. And it means that we, as employers, have to put more emphasis on mentoring programs, so that younger workers can benefit from the skills and experience of older workers, ensuring that intellectual capital is not lost.

Source: Bank of Canada Speeches (March 8, 2007)

Case Study: How a Social-Service Group Tailors its Appeal to Older Employees

In the March 8 issue of The Chronicle of Philanthropy, Elizabeth Schwinn writes about how the YMCA of Greater Rochester made a major push, starting in 2004, to recruit older workers and aged its workforce so that a full 20% of the charity's 2,100 workers are older than 50--its oldest employee being an 89-year-old fitness instructor. According to Fernán R. Cepero, the Rochester Y's vice president for human resources, this change the Y has found that:

• older people always show up for work, unlike some of his younger employees;
• the older employees are more likely to complete assignments and possess speaking and writing skills that younger people sometimes lack;
• older workers are eager to learn new skills and are savvy about new technology;
• the turnover rate among workers who are 50 or older is less than 2 percent, compared with 20 percent overall.

The YMCA may be a leading example of how some experts suggest that charities may be in a good position to recruit some of the boomers leaving jobs in business.

Nearly two-thirds of baby boomers say they want to work for a nonprofit organization or the government after they retire, according to a 2005 survey by the MetLife Foundation and Civic Ventures, a nonprofit think tank. "These boomers represent a vast pool of knowledge and experience," says Patrick Cullinane, director of a program at the American Society on Aging that encourages older people to get involved in civic activities.

To get those older workers, though, charities will have to learn what incentives they must offer them.

"You're looking at a generation that has a desire to work, but not necessarily for money," says Tim L. Wollerman, manager of work-force resources at the AARP. "They want to work in a different capacity or nontraditional hours. They want a stronger work-life balance."

Source: The Chronicle of Philanthropy "A Charity's Mature Vision" (March 8, 2007)

Italy: Prodi Government Proposes Raising Retirement Age, Other Pension Reforms

According to a report from La Republica, Italy's Prime Minister Romano Prodi plans to discuss pension reforms with unions immediately after being re-instated by parliament, including a proposal to increase the retirement age from from 57 to 58 on January 1, 2008, after 35 years of pension contributions. The retirement age would then gradually be increased, it said.

Source: AFX News Limited "Italy govt to discuss pension reform with unions after confidence vote - report" (February 26, 2007); La Republica "In pensione a 58 anni dal 2008
il governo scrive la sua riforma" (February 26, 2007)

United States Senate: Bills Introduced To Help Older Workers and Businesses Hiring Them

Two bills have bene introduced in the U.S. Senate by Sen. Herb Kohl (D-WI) to benefit older workers and businesses in America. The first, "he Older Worker Opportunity Act of 2007" (S.708), pa tax credit for businesses that employ older workers (ages 62 and up) in a "flexible work program," which must provide a full- or part- time flexible work schedule and full pension and health care benefits. The credit equals 25 percent of an older worker's wages, and expires after 2010.

The second, the Health Care and Training for Older Workers Act (S.709), would extend COBRA health insurance from the time of retirement (ages 62 and up) until seniors become eligible for Medicare at age 65, as well as improves access for seniors to federally-funded job training programs. In addition, the bill would establish through the Department of Labor a clearinghouse of best practices in the private and public sectors for hiring and retaining older workers.

Source: Senate Special Commitee on Aging Press Release (February 28, 2007)

GAO Forum Discusses Engaging and Retaining Older Workers

The U.S. Government Accountability Office (GAO) has issued a report summarizing a forum it convened in December 2006 to address the issues surrounding engaging and retaining older workers. Participants included experts representing employers, business and union groups, advocates, researchers, actuaries, and federal agencies.

Issued contemporaneosly with the Comptroller General's testifying at teh Senate Special Committee on Aging's hearing on the topic, the report--Highlights of a GAO Forum: Engaging and Retaining Older Workers--summarizes the ideas and themes that emerged at the forum, the collective discussion of participants, and comments received from participants based on a draft of the report. Among other things, forum participants discussed obstacles, best practices, and lessons learned from programs to help those older workers who can to work longer and better prepare for retirement, and considered strategies for encouraging organizations to implement practices that will result in more opportunities for older workers:

Key Obstacles: Some employers' perceptions about the cost of hiring and retaining older workers are a key obstacle in older workers' continued employment; total compensation and training costs were seen as primary concerns. Workplace age discrimination, the mismatch of workers' skills and availability of jobs because of changes in the economy, as well as the need to keep skills up to date, are all challenges facing older workers. There is a more limited pool of interested workers because of financial incentives to retire as soon as possible, workers' desire to retire or change careers, and some jobs' requirements that make continued work unappealing or unfeasible because of health issues. Legal and regulatory requirements hinder hiring and retaining older workers.

Best Practices and Lessons Learned: Participants shared examples of best practices and lessons learned, such as (1) use nontraditional recruiting techniques such as partnerships to help identify and recruit older workers; (2) employ flexible work situations and adapt job designs to meet the preferences and physical constraints of older workers; (3) offer the right mix of benefits and incentives to attract older workers such as tuition assistance, time off for elder care, and employee discounts; (4) treat all employees in a fair and consistent manner and employ a consistent performance management system to prevent age discrimination complaints; and (5) provide employees with financial literacy skills to ensure they have a realistic plan to provide for retirement security.

Strategies: (1) Conduct a national campaign to help change the national mindset about work at older ages. (2) Hold a national discussion about what "old" is to help change the culture of retirement. (3) Strengthen financial literacy education to help workers prepare to retire. (4) Create a clearinghouse of best recruiting, hiring, and retention practice for older workers. (5) Make the federal government a model employer for the nation in how it recruits and retains older workers. (6) Create a key federal role in partnerships to implement these strategies. (7) Consider specific legislation or regulations to increase flexibility for employers and employees to create new employment models.

Source: U.S. Government Accountability Office Abstract (February 28, 2007)

U.S. Senate Aging Commitee Hears Testimony on Economic Impact of Aging Workforce

On February 28, the Senate Special Committee held a hearing at which two high-ranking Federal officials testified about the economic consequences of an aging workforce. The hearing, entitled "The Aging Workforce: What Does it Mean for Businesses and the Economy?", also featurerd witnesses who addressed ways in which businesses can implement flexibility in the workplace in order to prevent a brain drain as seniors retire and who discussed supporting older learners who want to remain in the workforce.

In his opening remarks, Senate Aging Chairman Herb Kohl (D-WI)said that "surveys show that while most employers are aware of the looming brain drain, they are not prepared for it." However, he went on, "{w]e can’t afford to wait until the retirement wave is upon us. We must encourage businesses to adopt policies now to attract and retain older workers as they are confronted with the coming labor force shortage. And the message could not be more urgent, as time is short: the first of the Baby Boom generation will reach retirement age next year."

Also testifying (with links to their statments) were:

• David Walker, Comptroller General, US Government Accountability Office, Washington, DC, who presented the GAO's report on the "Comptroller General's Forum on Engaging and Retaining Older Workers"
• Donald Kohn, Vice Chairman, Board of Governors of the Federal Reserve System, Washington, DC, who testified that economic growth could decline significantly to 2.2 percent by 2015 as a direct result of the declining labor force participation of our aging society.
• Marcie Pitt-Catsouphes, Director, Center on Aging and Work/Workplace Flexibility, Chestnut Hill, MA
• Javon Bea, President and CEO, Mercy Health System, Janesville, WI, a company currently ranked the #1 employer for older workers by AARP.
• Preston Pulliams, District President, Portland Community College, Portland, OR

Source: Senate Special Committee on Aging Press Release (February 28, 2007)

Other Sources: Los Angeles Times "Senators search for ways to keep boomers on the job" (March 1, 2007)