United Kingdom: Survey Shows More Older Workers Planning To Opt Out of Automatic Pension Enrollments

A survey conducted by B&CE with respect to its United Kingdom customer views and intentions around the introduction of the National Employment Savings Trust (NEST) in 2012 show that older workers are much more likely to opt out as automatic enrollment is phased in until 2017. While only 10% within the 18-34 age group indicated that they would opt out, as did 17% of those in the 35-54 range, 42% of those 55 and older said they would opt out.

John Jory, Director of B&CE Insurance Ltd, commented: "The survey results for the higher age bands are disappointing but perhaps not surprising." B&CE suggested that for older workers might feel that it’s too late to start saving, especially with the potential negative impact of means testing.

Source: B&CE Benefit Schemes News Release (January 26, 2010)

United Kingdom: Equality and Human Rights Commission Launches New Program for Older Workers

Accompanied by research report and policy brief, the United Kingdom's Equality and Human Rights Commission (EHRC) has released its "Working Better - The over 50s, the new work generation " to open up more work opportunities for older Britons and address the challenges of an aging workforce. In so doing, EHRC has made a series proposals for fundamental changes to employment policies, including "abolishing the default retirement age, the extension of the right to request flexible working to all, overhauling employer recruitment practices to prevent discrimination and improved training and development."

EHRC's research report--"Older workers: employment preferences, barriers and solutions"--was authored by Deborah Smeaton, Sandra Vegeris and Melahat Sahin-Dikmen and finds, among other things, that of workers aged 50-75:

• 24% of men and 64% per cent of women say they plan to keep working beyond the state pension age;
• 55% cent say they are unhappy with some aspect of their working lives;
• half say the availability of part-time or flexible work would help them;
• 38% of men and 46% of women are not aware of the right to request flexible working available to adult carers; and
• 60% say they are as physically capable now to perform their jobs as when younger.

EHRC's policy briefing--"Working Better: The over 50s, the new work generation." draws on the new research and contains findings, recommendations and practical solutions for government and employers, and also features case studies from both employees and employers. In presenting its recommended solutions, EHRC states:

Tackling barriers to the employment of older people requires taking action on a number of fronts: the quality and flexibility of jobs; occupational health; retirement and pension policies; and attitudes and assumptions about the older generation. This will mean collaboration between government, employers, trade unions, occupational health experts and others.

Source: Equality and Human Rights Commission Media Release (January 25, 2010)

Canada: Economic Report on Ontario Points to Aging Workforce

The "Ontario's Long-Term Report on the Economy," issued by the Ministry of Finance, states that, among other things, Ontario's working-age population share (ages 15-64) will decrease from 69.4% of the population in 2009 to 61.5% by 2030. In absolute numbers, the working-age population is expected to increase by 13.5%, but that is about half the growth seen over the previous two decades.

Population aging and the slowing pace of growth in the working-age group could contribute to a slower rate of future real gross domestic product (GDP) growth.

Since participation in the job market is significantly lower for older age groups, population aging will be a factor in slower labour-force growth to 2030. As the large cohorts of baby boomers reach retirement age, the number of people turning 65 is projected to surpass the number entering the working-age group (at age 15) from 2017 until the early 2030s. As a result, the working-age group will grow solely because of net migration during this period.

While looking to immigration, the report also encourage policies and workplace initiatives that promote more flexible work arrangements in all segments of the working-age population and specifically put forward facilitating phased retirements as a way to encourage skilled workers to remain in the workforce longer, either full time or part time.

Source: Ontario Ministry of Finance News Release (January 22, 2010)

Australia: Government Contemplating Tax Changes to Encourage Older Workers To Remain Employed

According to The Australian, one result of a government review of taxes could be a lower marginal rate for older workers as an incentive to stay in their jobs. Speaking at a tax conference in Sydney, Ken Henry, chairman of the tax review, told attendees that "[o]lder people are less likely to be in the workforce, due to retirement or working less hours. . . . Marginal tax rates might need to be adjusted over time to ensure they reflect the changing abilities and propensities to work of different cohorts at different times in their lives."

The government's thinking is that taxes would make a bigger difference to the number of older workers deciding to remain in the workforce than it would for people of prime working age, who were likely to stay employed in any case.

Source: The Australian "Tax breaks for older workers" (January 22, 2010)

NCCI Issues Report on Workplace Injuries of Workers 65 and Older

The National Council on Compensation Insurance (NCCI) has released a new report examining how workers aged 65 and older differ from all workers in terms of their share of claims, indemnity and medical payments, frequency, and indemnity and medical severity (i.e., cost per claim). Among other things, the report--"Claims Characteristics of Workers Aged 65 and Older"--finds that:

• falls/slips/trips are by far the greatest cause of injury among older workers;
• indemnity severity is less for older workers, largely because of the lower average weekly wage of such workers; and
• medical severity is higher for older workers, although the differential between workers aged 65 and older and nearby age cohorts is small.

NCCI decided to follow up on an earlier study on workers aged 20-64, since labor participation rates of workers aged 65 and older have increased by nearly 50% since the late 1980s, and the rate for workers aged 55 to 64 has also increased (from 55% to 65%).

For safety and loss prevention managers, the increase in the number of older persons in the workforce presents both challenges and opportunities. The challenges reflect the fact that as people age there appears to be a deterioration in factors such as eyesight (in terms of acuity, peripheral vision, and depth/ color perception), hearing, muscle tone (strength, flexibility), reaction time, and mental processes (slower recall rates and less effective short-term memory).

The opportunities involve steps that can be taken to reduce the risks in the workplace for older workers that take into account these changing circumstances. For example, to reduce the risks of falls, employers can enhance lighting where necessary, install slip-resistant flooring, and provide handrails (steps that would likely benefit the safety for all workers as well). The installation of noise dampening materials may also help where hearing may be an issue (e.g., on the factory floor). Employers can also provide wellness and exercise programs and provide information and support for common health problems that may affect older workers (such as arthritis and adult-onset diabetes).

Source: National Council on Compensation Insurance, Inc. News Release (January 15, 2010)

Urban Institute Issues Series of Reports on Trends and Challenges Facing Older Workers in Recession

The Urban Institute's Retirement Policy Program recently released a number of analyses detailing new trends and challenges facing older Americans during the recession. Included in this series are:

• "Unemployment Statistics on Older Americans" As the recession has increased joblessness among older Americans, this report provides graphs and tables that report unemployment rates and how they have varied by age, sex, race, and education since 2007.
• "Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement" This study examines disability benefit receipt, income, and poverty status for a sample of Americans as they age. The results underscore the precarious financial state of most people approaching traditional retirement age with disabilities.
• "Older Adults' Labor Force Participation since 1993: A Decade and a Half of Growth" Charts showing that labor force participation rates—-the percentage of adults working or looking for work—-increased sharply for older men and women between 1993 and 2009.

Source: Urban Institute Retirement Policy Program " New Employment, Social Security Take Up Rate and Disability Benefits Data" (January 15, 2009)

AARP Reports that Unemployment for Older Workers Not Improving as Recession Peaks

AARP has been tracking how older workers fare as the United States comes out of the recession. Looking at the November 2009 numbers, it found that while unemployment make have peaked, older job seekers saw their unemployment rate, duration of unemployment, involuntary part-time employment rate, and job-seeking discouragement rise. Further, looking at the December 2009 numbers, AARP reported that overall unemployment did not increase, 29,000 more persons aged 55 and over were unemployed in December than in November, bringing the total unemployment rate for this group up to 7.2% from 7.1%.

Sources: AARP Public Policy Institute Fact Sheet (December 2009), Fact Sheet (January 2010)

United Kingdom: Survey Finds Over-50s Looking to Keep Working in Flexible Retirement

According to a survey conducted by Saga, around 24% of people in the United Kingdom over 50 have rejected full retirement in favor of continuing with some paid work, as well as carrying out voluntary work and having more leisure time. In addition, according to the Saga Manifesto, which advocates the abolition of the default retirement age, almost 97% of over-50s reject the idea of working doggedly until state retirement age and greatly prefer to scale back working hours before this time.

Saga predicts that there will be a 50% increase in the number of people who take this approach to retirement during the next 10 years, with around three million over-50s combining work and volunteering by 2019. People will typically start scaling back their working hours when they are 57, with the average person carrying out 27 hours a week of paid work and eight hours of voluntary work.

Sources: Saga Media Release (January 11, 2010); UK Press Association "Over 50s taking gradual retirement" (January 7, 2010)

EBRI Research Shows Decline in Tenure of Older Workers Other than the Oldest

According to research published in EBRI Notes in January issue, while the median tenure of workers--the midpoint of wage and salary workers’ length of employment in their current job--was virtually unchanged over the past 25 years, there were significant changes among older workers.

Thus, while the median tenure for all workers was 5.1 years at the same job in 2008, compared with 5.0 years in 1983, among those ages 60–64, the percentage with 25 or more years of tenure increased by more than 3 percentage points from 2006–2008, after a fairly steep decline from 1983–2006. In 1983, 23.3% of wage and salary workers ages 60–64 had tenure of 25 or more years, compared with 16.6% in 2006. For those ages 55–59, a persistent decline occurred: from 22.7% in 1983 to 17.6% in 2008.

Source: EBRI Press Release (January 7, 2010)

Conference Board Job Satisfaction Survey Finds Older Workers as Dissatisfied as Others

The Conference Board's report on job satisfaction suggests that Americans of all ages and income brackets continue to grow increasingly unhappy at work. However, the Board noted that the extreme dissatisfaction of younger workers could bode ill for multi-generational workforces:

"These numbers do not bode well given the multi-generational dynamics of the labor force," says Linda Barrington, managing director, Human Capital, The Conference Board. "The newest federal statistics show that baby boomers will compose a quarter of the U.S. workforce in eight years, and since 1987 we’ve watched them increasingly losing faith in the workplace." Twenty years ago, some 60 percent of that generation was satisfied with their jobs. Today, that figure is roughly 46 percent. Barrington adds: "The growing dissatisfaction across and between generations is important to address because it can directly impact the quality of multi-generational knowledge transfer-which is increasingly critical to effective workplace functioning."

Interestingly, even if older workers might seem more satisfied, that may be masking some other issues. As one response wrote:

Older workers who are in the age group typically most satisfied with their jobs, aren’t. They stay because the value of their investments and 401(k)s have fallen so far they can’t afford to retire; they have fewer options due to age, and are less likely to relocate for work.

Source: Conference Board News Release (January 5, 2010)

Other Reactions: John Zappe ere.net Blog Poat (January 19, 2010)

Netherlands: Proposal to Cut Duration of Unemployment Benefits to Encourage Older Workers To Seek Work

According to published reports, Chris Buijink, Secretary-General of the Ministry of Economic Affairs of the Netherlands, has called for reducing the length of time people can claim unemployment benefit to encourage them to find work as quickly as possible. Writing in the economics journal "Economic Statistische Berichten" (ESB), Buijink suggested that a reduction in the length of time income-related jobless benefit is paid would be an important stimulus to find new work, particularly among older workers.

The long slide towards a pension must be made less attractive. Unemployment is still an attractive way out for many older workers,' he said. While there have been improvements in the job take-up rate among older workers, just 26% of people aged 60 to 64 still have a job, he pointed out.

However, "Christian Democrat spokesman Eddy van Hijum and Labour's Roos Vermeij told Trouw it was too simplistic to say older workers would be encouraged to stay in work if their benefit rights were cut." Instead, they argued, "efforts need to be made to change the working culture and employers must be encouraged to invest in their older staff. Only some 26% of the over 60s are still in work."

Sources: Dutch News "Top civil servant calls for jobless benefit cuts" (January 7, 2010); NRC Handelsblad "Topman EZ wil dat WW wordt beperkt" (January 7, 2010); Dutch News "Jobless benefit cut no solution for older staff" (January 8, 2010)

Montana: State Economist on Challenge of Aging Workforce

Barbara Wagner, an economist with the Montana Department of Labor and Industry, predicts that the the aging workforce is going to be affecting Montana’s labor markets in the next few years--much sooner than other places in the country. Writing in the Big Sky Business Journal, she suggests that now is the time to plan for changes an aging workforce will bring by developing flexible worker training and adopting new workplace practices.

Montana has a median age of 39.3 compared to the national average of 36.8--the 8th oldest population in the country. In addition, the traditional working age population aged 16 to 65 is expected to start declining in Montana starting in 2012, while the U.S. population aged 16 to 65 is not expected to decline before 2030. In fact, already over 19.3% of Montana’s workers are over the age of 55 and approaching retirement.

According to Wagner, overall demographics are also going to affect job demands. Thus, an aging population will put stress on the health care sector, dramatically increasing employment needs, while a decreasing youth population could lead to a decline in educational employment. However, she notes that increased training needs could be a counter-vailing influence.

Among other things, she offers two solutions: (1) reduce the need for more workers while still growing our economy by increasing worker productivity, and (2) increase the number of workers either from in-migration of workers from other states, or by increasing labor force participation from its current level. While some of these changes will occur naturally, more will be needed in increased training programs and economic infrastructure to meet employment needs.

Source: Big Sky Business Journal "Montanans Getting Older" (January 6, 2010)

Opinion: Utilizing Physical Examinations to Help Avoid Worker's Comp Claims when Hiring Older Workers

As older workers become more important to employers, concerns also rise as to the worker's compensation costs associated with older workers. According to Julie Croushore, a claims supervisor with National Interstate Insurance Company, older employees "present an added risk of injury and workers’ compensation claims as many suffer from arthritis and other chronic pre-existing medical conditions."

Statistics suggesting that older workers suffer higher fatalities from workplace injuries and lose more more days than younger workers can mean increased workers' compensation claims and higher insurance premiums. Croushore suggests that the nation’s aging workforce demands a proactive approach to risk managemen: "most workers’ compensation claims are preventable. The trick is to determine ahead of time if an individual is capable of performing a job safely, particularly in the case of older workers with pre-existing and chronic conditions."

Describing a scenario in which a longhaul truckdriver retires to be closer to his family and is hired by a local delivery company, only to have him get injured and go out on workers' comp at his new employer's expense, Croushore recommends that an employer should use a a pre-employment physical examination or abilities test to determine whether a candidate can safely deal with the physical demands of a new job.

Through the exam, the employer would have learned the extent of [the employee]’s arthritis and realized he couldn’t handle those truck steps many times a day. Knowing that would have enabled the delivery company to make a more informed employment decision — including a decision not to hire [employee] because he was medically unable to perform the essential job function of a delivery driver safely. Or, the employer could have decided to offer him a driving position that didn’t involve many stops.

Source: Transport Topics "Opinion: Workers’ Comp and Our Aging Workforce" (January 4, 2010)

Slovenia: Pension Reforms Include Raising Retirement Age

Slovenia faces a new reform of its pension system in 2010. The blueprint presented in September 2009 envisages among other things the raising of the full retirement age to 65 for both men and women, a measure unacceptable for trade unions. In line with the plans unveiled by the government, changes would be introduced gradually between 2011 and 2020, with the turning point coming in 2015, which would count as the formal starting year for the new pension system.

The new system would include everyone under 55 at that point. All other citizens would fall under an updated version of the existing system. The changes envisage the raising of the minimum retirement age from 58 to 60 years, while full retirement would come at 65. In line with the existing reform from 2000, the full retirement age will stand at 63 for men and 56 years and eight months for women in 2010. It was planned to eventually rise to 61 for women.

Source: Government Communication Office "2010 Brings Pension Reform" (January 2, 2010)

Survey: Employers Looking to Retain and Hire Older Workers

Careerbuilder.com's 2010 Job Forecast indicates that there will an uptick in employer hiring in 2010. Among other things, it reports that companies understand the intellectual capital mature workers bring to their organization and 27% say they are open to retaining their workers who are approaching retirement. In addition, 16% say they are likely to rehire retirees from other companies in 2010, and 10% are likely to provide incentives for workers at or approaching retirement age to stay on with the company longer.

Source: Careerbuilder.com Press Release (December 29, 2009)