Survey: EBRI Retirement Confidence Survey Shows More Americans To Delay Retirement

According to the Employee Benefit Research Institute (EBRI), Americans' confidence in their ability to retire appears to be stabilizing as the volatility of the recession has abated, but their self-described preparations for retirement continue to erode. Published as EBRI Issue Brief No. 340, "The 2010 Retirement Confidence Survey: Confidence Stabilizing, But Preparations Continue to Erode", EBRI's 20th annual survey, shows that, among other things, a growing number of American workers are planning to delay retirement and fewer have saved for retirement.

With respect to when they retire, 24% of those surveyed report they have postponed their planned retirement age in the past year. Reasons given include the poor economy (29%), a change in their employment situation (22%), inadequate finances (16%), and the need to make up for losses in the stock market (12%). Looked at over a longer time, the percentage of workers who expect to retire after age 65 has continued to increase--from 11% in 1991 to 14% in 1995, 19% in 2000, 24% in 2005, and 33% in 2010.

With respect to retirement savings, the survey finds that 69% report that they and/or their spouse have saved for retirement (down from 75% in 2009), 60% say that they and/or their spouse are currently saving for retirement (down from 65% in 2009). Furthermore, it finds that an increased percentage of workers report they have virtually no savings and investments, with 27% saying they have less than $1,000 in savings, and 54% percent that the total value of their household's savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

Source: Employee Benefits Research Institute Press Release (March 9, 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)

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)

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)

Business Week Publishes Special Report on the "Unretired"

Business Week has published a special report exploring how--with the financial crisis having forced people to postpone, rethink, or come out of retirement--retaining this talent pool brings both opportunity and challenges for companies. The report includes:

• "How Older Workers Can Lighten the Load", a case study of how a program at Abbott Labs gives those 55+ but not yet able to retire a chance to extend their working years at peak pay;
• "How to Reinvent Yourself Post-Recession", advice to older workers on how to pause, take stock, and chart a new course for the second half of life;
• "How Companies are Managing 'Unretirement'", a perspective from Towers Perrin about how leading companies are preparing for the demographic fallout of the current recession;
• "How to Manage Gen U: Generation Unretired", advice for managers to recognize the unique set of opportunities that "Gen U" presents and how to navigate any concerns; and
• "How Companies Manage the Unretired", a video presentation on how, as employees delay retirement, companies must cope with higher costs for benefits and the need to create opportunity.

Source: Business Week Special Report: How to Manage "Generation Unretired" (November 17, 2009)

Urban Institute Research Shows Increase in Older Worker Labor Participation Rates

Growing concerns about retirement income security appear to be leading to an increase in seniors’ labor force participation rates stems, according to a report from the Retirement Policy Program of the Urban Institute. "Rising Senior Unemployment and the Need to Work at Older Ages" also reports that unemployment rates for older workers reached record levels in 2009, partly because fewer workers eligible for early retirement benefits are dropping out of the labor force. With more older workers remaining in the labor force and searching for work after they lose their jobs, the there is an imperative for new policies that help address the special challenges that older job seekers face.

Unemployment has serious consequences at older ages. It usually takes older workers an especially long time to become reemployed. The earnings lost while out of work certainly make it more difficult for unemployed people to meet current spending needs. But unemployed older workers also forgo Social Security and pension credits and are less able to save, leaving them with less money in retirement. When older workers become reemployed, they usually end up earning much less than they did on their former jobs.

Among other things, the report calls for the federal and state governments to improve workforce development programs. They need additional funding and be redesigned to better serve workers of all ages. In addition, Congress could change Medicare secondary payer rules to require the federal health insurance program to provide primary coverage to workers age 65 and older with employer-sponsored health benefits, instead of forcing these older workers to rely primarily on their employer’s insurance.

Source: Urban Institute Press Release (September 23, 2009)

Research: Lower Income Unemployed Older Workers Facing Economic Crisis

ExperienceWorks has released a research report finding that 46% of low-income unemployed workers age 55 and older need to find jobs so they don’t lose their homes or apartments, and approximately half (49%) have been looking for work for more than a year. The research was based on a survey of 2,000 people enrolled in the Senior Community Service Employment Program (SCSEP)

According to "Overlooked and Underserved: The Crisis Facing America’s Older Workers, 38% of these older workers had retired but they are going back to work, and many have no end in sight for their working years. For those who do have a retirement time frame, the average targeted retirement age is 72. In addition, 90% of survey respondents age 76 and older plan to continue working in the next five years.

“These people are at the age where they understandably thought their job searching years were behind them,” said Cynthia Metzler, president and CEO of Experience Works. “But here they are, many in their 60s, 70s and beyond, desperate to find work so they can keep a roof over their heads and food on the table.” Forty-six percent of these older job seekers say they sometimes have to choose between paying rent, purchasing food or purchasing medication.

In addition, according to the report, older workers say the poor economy and age related barriers including lack of the necessary training are the most significant challenges they face to finding employment. 73% strongly agree or somewhat agree that their age makes it difficult for them to compete for jobs with younger workers.

“This study underscores the need to create policies that remove barriers to employment for older workers, and provide additional programs and services specifically aimed at helping older people re-enter the workforce or remain working,” said Metzler. “These actions will benefit everyone because training programs such as the SCSEP have proven to be successful in helping unemployed older workers transition to unsubsidized employment.” The SCSEP, which is the only federal program designed specifically for older low-income workers, is currently funded to serve less than 1 percent of the eligible population.

Source: Experience Works Summary (September 22, 2009)

Australia: Study Suggests Blue Collar Workers More Likely To Delay Retiremement

According to news reports, researchers report that Australian baby boomers' expected retirement age is now reaching 64.3 years and that it is blue-collar boomers--more likely to struggle with the physical demands of working into their late 60s than white-collar workers--who are bumping up the expected retirement age. According to a paper "Which of Australia’s Baby boomers expect to delay their retirement? An occupational overview" by University of Tasmania social researchers Natalie Jackson and Maggie Walter to be presented on July 9, "Professionals and Associate Professionals--many of whom hold so-called "critical skills" which are central to the functioning of many businesses, organisations and departments--have the youngest expected retirement ages, while Labourers and Production/Transport Workers have the oldest."

In comparing expected and preferred retirement ages, Jackson and Walter find that the gap between the two is generally bigger for blue-collar than office workers, with "insufficient financial resources to support retirement" cited as the main reason. For example, tradespeople in the automotive sector expect to retire at a median age of 66.1 years, but their preferred age of retirement is 58.3.

Overall, the study shows a rapid rate of change in the expectations of Australian workers towards retirement. "As recently as 1997, average age of retirement was 58 for males and 41 for females," it notes. "Our overall finding is of a median expected retirement age of 64.3 years for workers aged 40-59 in 2006."

Source: The Australian "Baby boomers ready to work longer" (June 1, 2009)

AARP Research Report Explores New Means for Transitioning to Retirement

An AARP research report has been published exploring the concern that policies being explored to extend working lives—-and delay the claiming of Social Security benefits—-as a means to ensure workers' retirement security and Social Security's finances may inflict real hardship on some older workers who retire earlier because of health and related problems. Accordingly, in "Employment Support for the Transition to Retirement: Can a New Program Help Older Workers Continue to Work and Protect Those Who Cannot?", David Stapleton of Mathematica Policy Research, Inc., proposes a new program--Employment Support for the Transition to Retirement (ESTR)--that could help “break the deadlock” that stymies efforts to adopt policies that encourage later retirement.

Stapleton's vision of ESTR is that it would provide assistance to workers who experience large involuntary earnings losses as they approach age 62. It would provide a wide range of benefits, tailored to individual need—including wage subsidies and other work supports, health insurance subsidies, disability benefits, extended unemployment benefits, and employment counseling. While not individually new, what is new is the idea of a substantial and coordinated expansion of these elements in the context of retirement policy reform.

Source: AARP Research Report In Brief (April 2009)

Denmark: Survey Finds Workers in Health and Social Services Industry Delaying Retirement

According to a survey conducted by Pensionskassernes Administration (PKA), fewer PKA members in the health and social services industry are retiring than earlier. The number of active members over the age of 60 has increased from 13,500 to 18,000 between 2005 and 2008, while the proportion of health workers retiring at 60 fell to 13.2% in 2008.

"It surprises us that things are going that way--fewer retire when several have been given the option. It is of course positive for society, because especially in the health sector are labor shortages. But it is also good for the individual who will receive a higher pension by deferring the retirement age a few years, "says member manager of PKA Britt Brandum. [Google Translate from Danish]

According to Brandum, the vast majority of PKA members, around 90%, are women who have a life expectancy of around 85 years. Thus, when those whose choose to retire at 60 face a long retirement period of 25 years.

According to Peder J. Pedersen, professor of Velfærdsforskning at the Department of Economics, University of Aarhus, and a member of the Employment Commission, the figures are interesting and reflect a stated desire of employers for older workers to work a few extra years because of labor shortages. While if this progress continues, the shortage of manpower in the health sector will be easier, but to close the gap completely, it must be something more dramatic.

Sources: Pensionskassernes Administration Nyt fra PKA (February 26, 2009); Investment & Pensions Europe "Fewer Danish health workers are retiring early" (February 27, 2009)

Canada: Economy Leading Boomer Business Owners To Delay Retirement

According to a poll conducted by the Royal Bank of Canada, 37% of Canadian boomers who plan on retiring in the next five years and who own their own business plan on delaying their retirement due to current economic conditions. The Bank's 19th Annual RBC Registered Retirement Savings Plans Poll also found that 28% of Canadian boomers plan on delaying their retirement due to current economic conditions, 43% say their retirement has been delayed between one and two years, 37% say three-to-five years, and 9% say they don't know.

Further comparing business owners to other boomers, the survey found that 32% of retiring boomer business owners say they will never fully retire, 19 percentage points above the Canadian boomer average. 50% of retiring boomer entrepreneurs say they will be semi-retired or working part-time at age 65, compared to 40% of the general boomer population. In addition, only 37% of retiring boomers who own their own business expect to be fully retired at the age of 65, as compared to the Canadian boomer average of 47%.

Source: Royal Bank of Canada Press Release (February 18, 2009)

Survey: Financial Planners Report Clients Nearing Retirement Age Are Staying at Work

The American Institute of Certified Public Accountants (AICPA) has surveyed clients of financial planners and reports that nearly 35% of those approaching retirement age are postponing leaving the workforce because of recent economic conditions. 67% of those plan to delay retirement no more than five years, but 9.6% are planning on postponing retirement six or more years.

"What this suggest is that 70 is the new 65," AICPA Vice President James Metzler said. "People are living longer and getting more satisfaction from working later in life. At the same time, the market downturn has reduced wealth and CPA financial planners are seeing clients delay retirement plans as a result."

Source: The American Institute of Certified Public Accountants Press Release (February 5, 2009)

Singapore: Survey Shows Many Boomers Want To Work Past Retirement Age

The "first ever" survey of baby boomers in Singapore finds that boomers want to remain active in their "golden years." According to the Ministry of Community Development and Sports, more than 70% of boomers (those aged 43 to 60) were in the workforce or looking for work, almost half wished to or expected to have to work as long as they could, and, among those who specified an age at which to retire from work, about 30% expected to do so at age 65 or older, beyond the current retirement age of 62.

With respect to continued work, 36% of boomers desired to work part time. In addition, the top three conditions that these boomers look for in post-retirement work were flexible work, similar income, and fewer hours of work. For university-educated boomers, a stimulating workplace and the chance to guide or mentor younger workers were more important attributes than income continuity and work hours.

Sources: Ministry of Community Development and Sports Press Release (January 9, 2009); Channel News Asia "Survey shows 3 in 10 expect to retire at age 65 or older" (January 9, 2009)

Singapore: Prime Minister Reenforces Need for Employers to Retain Older Workers

Addressing the AARP-Council for Third Age Conference "Reinventing Retirement Asia", Singapore Prime Minister Lee Hsien Loong has urged employers to let seniors work longer, focusing on legislation that will require employers to offer re-employment to workers for three more years (until 65), though not necessarily at the same job or pay. According to Lee, "[t]he best way for people to adjust to longer lifespans is to continue working for as long as they can, and to keep themselves occupied after formal retirement."

With respect to retirement age, Lee said that government has only limited abilities to change habits. Thus, even though Singapore's official retirement age is 62, only six out of every ten men are still working at 62, the rest having already retired earlier, while even fewer women work till 62, most having dropped out of the workforce much earlier to raise their families. Accordingly, Singapore is not legislating to further delay the retirement age, but to require employers to offer re-employment to workers at 62 for another three years until 65, though not necessarily in the same job or at the same pay. Other efforts may be more involved:

We can also do more to raise the employment rate of older women. It is often tough for women to continue working while raising a family, even if the husband carries his share of the household responsibilities. We can help by adopting more flexible work arrange¬ments, developing family-friendly workplace policies, and providing accessible and affordable childcare. We should also encourage older women to return to the workforce, through targeted outreach and retraining.

Source: Prime Minister's Office Speech (January 8, 2009)

Australia: Economic Conditions Forcing Older Workers to Defer Retirement

According to news reports, research conducted by Rice Warner indicates that deteriorating financial conditions will force 40,000 retirees in Australia to defer retirement and move into part-time work and others who retired since 2007 will return to the workforce.

Writing in The Australian, Adele Ferguson also says that "seniors groups believe the deterioration in retirement savings over the past year will force the Rudd Government to scale back the way it calculates earnings on retirees' investments."

Sources: Smart Company "40,000 retirees to shelve retirement plans – here’s how you can benefit" (January 5, 2009); The Australian "40,000 retirees forced to keep working because of economic downturn" (January 3, 2009)

European Parliament Report on Social Security Addresses Workplace Issues

Concerned that the increasing ageing population will affect social security systems, members of the European Parliament, in an own-initiative report, expressed their preoccupation with maintaining the core of European social models and, among other thngs, recommend encouraging higher employment rates.

According to the summary of the non-legislative resolution "Future of social security systems and pensions: their financing and the trend towards individualisation", the Parliament stresses the need to enable flexible retirement on a voluntary basis and suggests that it will necessary to discuss at national level raising the legal retirement age and encouraging workers to remain in employment on a voluntary basis, as long as conditions permit.

Source: European Parliament Press Release (November 20, 2008)

European Commission Issues Second Demographic Report on Aging Societies

The European Commission has issued its second demographic report to provides the facts and figures that are needed to assess where member states stand in responding to the challenges of demographic change. The 2008 report--"Demography Report 2008: Meeting Social Needs in an Ageing Society"--focuses on the aging society and changing family and household patterns in the EU. Among other issues addressed in the report are: What about the working population? Are people working longer? How are older people involved in society, besides work?

With respect to the baby boom generation and work, the report finds that the growth of the working-age (20-59) population is slowing down fast and will stop altogether in about 6 years; from then on, this segment of the population will be shrinking by 1 to 1.5 million people each year. While employment rates at age 60 are ten percentage points higher than in 2000, but there is still much room for improvement.

Employment after the age of 65, the typical statutory retirement age in many Member States, is very rare: only about 13% of men aged 65-69 years and 7% of women are still in employment. Part-time working could be a good way of achieving a gradual transition from work to retirement, but only about 11% of men aged 55-64 work part time and 38% of women.

Other findings include:

• There are major differences in the social activities of older workers across countries--more so than across socioeconomic groups in a given country.
• Rapid ageing requires adequate policy responses: opportunities to stay active on the labour
  market and in society; access to goods and services that preserve older people's autonomy; solidarity with the dependent and protection of their dignity.
• Member States can raise labour force participation, thus creating a better balance between the active and the retired.
• In about ten years, the potential for
  further employment growth will be exhausted; productivity will become the main
  engine of growth.

Source: European Commission News Release (November 21, 2008)

McKinsey Study Suggests Boomers Have To Keep Working for Both Their Good and for Good of Global Economy

According to a new study from the McKinsey Global Institute, the only realistic way to prevent aging boomers from experiencing a significant decline in their living standards and becoming a multidecade drag on U.S. and world economic growth is for boomers to continue working beyond the traditional retirement age. This, in turn, will require important changes in public policy, business practices, and personal behavior.

The authors--Eric D. Beinhocker, Diana Farrell, and Ezra Greenberg--found that two-thirds of the oldest boomers are financially unprepared for retirement, and many are not even aware of their predicament, and that US labor force participation rates are declining: "Without an unexpected burst of productivity growth or a significant upsurge in investment per worker, the aging boomers’ reduced levels of working and spending will slow the real growth of the US GDP from an average of 3.2 percent a year since 1965 to about 2.4 percent over the next three decades."

While many boomers do want to continue working, a number of institutional and legal barriers-—health care costs, labor laws, pension regulations, and corporate attitudes toward older workers—-could prevent them from prolonging their careers. Thus, the government must reallocate health insurance costs for older workers, businesses and boomers must agree on more flexible work arrangements, policy makers must reform private pensions, and Social Security must remove disincentives to remaining in the workforce.

Source: McKinsey Quarterly "Why baby boomers will need to work longer " (November 2008)

Survey: Economic Environment Leading to Delayed Retirements in United States

A survey of retirement plan sponsors conducted by International Foundation of Employee Benefit Plans finds that plan participants appear to be responding to the current economic and financial crisis by delaying retirement, saving less, and re-aligning their retirement investments. Specifically, 46% of plan sponsors stated their employees and plan participants are considering delayed retirement, and 38% noted that their employees are concerned about not saving enough for retirement.

In addition to reporting a jump in the number of plan participants considering delaying retirement, the report "Plan Sponsors and Participants: Partners in Times of Crisis" finds that a quarter of plan sponsors citing an increase in the actual number of eligible workers postponing retirement. With respect to investments, nearly 30% of respondents report that defined contribution plan participants have decreased their overall retirement plan contributions and 34% believe plan participants have reduced their exposure to equities in favor of less risky investment alternatives.

Source: International Foundation of Employee Benefit Plans Press Release (October 29, 2008)

AARP Study Reports Most Older Works Intend To Work into "Retirement" Years

An AARP survey has found that 70 percent of mature workers plan to work into what they view as their retirement years. Updating a 2002 survey, "Staying Ahead of the Curve 2007: The AARP Work and Career Study" reports that 27% of the 45-75 year olds questioned cited a need for money as the reason for continuing to work, while 21% attributed their decision to work in retirement to the fact that they enjoy working.

The study also reported that 51% of those interviewed said they plan to work part-time in retirement, while 29% do not plan to work. Another 11% plan to start their own business or work for themselves, while 6% plan to work full-time.

Included in the final report is a "Blueprint For Change" section that focuses on creative policies utilized by progressive employers. Among other things, these best practices include flexible schedules and work arrangements, cCompetitive health and other benefits, restructuring jobs or workplaces to accommodate employees’ unique needs later in life, recharging late-career workers with updated training, and utilizing knowledge retention strategies.

Source: AARP Press Release (October 20, 2008)

Urban Institute Study Finds Delayed Retirement by Poorer Boomers May Improve Retirement Finances

The Urban Institute has released a paper projecting wealth and income at retirement for low-income boomers. The findings suggest that most with low lifetime earnings will also have low incomes at older ages unless they either continue working or move in with others who help support them financially. Among other things, the report suggests that delaying retirement will improve outcomes for low-earning boomers, but will not increase retirement living standards dramatically.

In "Boomers at the Bottom: How Will Low Income Boomers Cope with Retirement, the authors Barbara Butrica, Eric Toder, and Desmond Toohey looked at the possible effects of delayed retirement, along with saving more and working more consistently over their lifetime. With respect to working longer, they projected delaying retirement by five years (from 62 to 67) and found that this would have a modest 10% increase on average lifetime earnings for purposes of calculating Social Security (rising from $11,000 to $12,100), but it would raise household income by 13% (from $10,700 to $12,100), because of the additional earnings that working generates on top of the increased income from Social Security, defined benefit plans, and retirement accounts.

Among low-lifetime-earner boomers, those with low income at age 67 have strikingly different work patterns at older ages than those with higher income at age 67. Only 15 percent of low-lifetime-earners with low-income work at age 67, and 11 percent work during retirement. In contrast, 47 percent of low-lifetime-earners with higher-income work at age 67, and 35 percent continue working after retirement. Among low-lifetime-earner boomers, low-income retirees will receive only $600, or 6 percent of their household income, from earnings, compared with %9,000, or 37 percent, for higher-income retirees.

Source: Urban Institute Research Summary (September 16, 2008)

Ohio: Study Shows Older Workers To Remain in Workforce

According to research conducted by Miami University's Scripps Gerontology Center, more workers over the age of 55 are expected to stay in the workforce in Ohio, with the proportion of older workers in the state's workforce expected to rise from 16.7% percent to 22.4% from 2006 to 2016--an increase of 34% during that 10-year period. The study ("Ohio's Aging Workforce: Opportunities and Challenges for Ohio's Employers"), authored by Lydia K. Manning and Shahla A. Mehdizadeh, focused on anticipated age-related changes in Ohio’s workforce and the effect these changes might have on employers, employees and society.

Among other things, the authors note that two-thirds of Ohioans age 55 to 64 are expected to be in the state's workforce in 2016, roughly 20% of Ohioans age 65 and older are expected to be in the state's workforce in the year 2016, and, by 2016, two-thirds of all job openings in Ohio are expected to be for positions replacing retirees. Circumstances keeping people in the workforce include the elimination of traditional pension plans by many private employers, stock market losses eroding the value of 401(k) plans, and need for many people to retain access to employer-based health insurance.

Sources: Miami University's Scripps Gerontology Center "Ohio's Aging Workforce: Opportunities and Challenges for Ohio's Employers"; AHN "More Workers Over Age 55 Expected To Remain In Workforce" (September 12, 2008)

Survey: Flexible, Delayed Retirements on Increase in United Kingdom

As part of CBI (Confederation of British Industry)/Pertemps Employment Trends Survey on telework and flexible work, CBI reports that the United Kingdom is experiencing a growth in flexible retirement. Specifically, in 2007, 31% of employees reaching retirement age asked if they could postpone their retirement. Employers granted 81% of those requests were granted, which CBI points out is still significantly lower than the 95% of flexible work requests from parents which are accepted.

Employers continue to face challenges when assessing requests to postpone retirement, and it is essential to keep a default retirement age as a trigger for discussion.

[John Cridland, CBI Deputy Director-General] said: "Many older workers do not want to retire, or do not feel financially secure enough to do so, particularly with the downturn in the housing market. In the majority of cases employers are very happy to retain older staff, who often have invaluable skills and experience."

Source: Confederation of British Industry Press Release (September 8, 2008)

Additional Reading: The Times "It is no time to retire as the gloom deepens" (September 8, 2008)

Netherlands: Government Encourages Work Changes to Allow Later Retirement

Netherlands social affairs minister Piet Hein Donner has said taht people involved in physically heavy jobs, such as construction work, should be able to switch to lighter tasks so they can continue to work after they are 62.

In addition, Donner says that the government is working on measures for to make older staff more attractive to employers. This could include giving employers a discount on social security contributions if they employ someone between 62 and 65 years.

Sources: NU.nl "'Doorwerken in andere baan na zwaar werk'" ["'Give older workers lighter tasks'"] (September 3, 2008)

EBRI Survey Suggests Ways Employers Can Encourage Workers To Postpone Retirement

According to results of conducted by the Employee Benefit Research Institute (EBRI), employers have a narrow window of up to two years in which they may be able to change retiring workers’ decisions by offering them incentives to remain with the company.

The "EBRI 2008 Recent Retirees Survey: Report of Findings" surveyed 4,981 workers in aerospace and defense industry companies who retired in 2003 or later and are currently between the ages of 55 and 65. Among other things, EBRI reports that many retirees would have been open to an approach from their employer asking them to stay longer with the company: 61% would have viewed the experience positively, while only 10% indicated they would have reacted negatively to an approach asking them to delay their retirement.

With respect to 19 possible incentives that might encourage retiring workers to postpone retirement, EBRI found that three appeared especially likely to be successful:

• feeling truly needed for an assignment;
• for retirees with a defined benefit pension, receiving a full pension while working part;
• being able to work seasonally or on a contract basis.

Source: EBRI Press Release (July 10, 2008); Issue Brief #319 (July 2008)

Survey: Affluent Boomers Stay in Workforce, Retain Mortgage Debt

According to Bell Investment Advisors's third annual survey of affluent boomers (those with investible assets of $1 million or more), members of the baby boom have no plans to leave the workforce any time soon and, in a major change from the prior generation when a major goal of retirement was to "burn the mortgage," more than 55% of surveyed boomers who currently hold mortgages do not plan to pay their mortgages off until their 70s.

With respect to retirement plans, 76% of boomers surveyed who are still working plan to continue working after age 62, and 40% plan to continue working into their 70's. For 72%, the major reason to continue working was for the "intellectual and social stimulation" work provides; 51% cited the goal of maintaining standard of living, and 41% the goal to avoid tapping into savings.

Of those taking the survey, 29 percent describe themselves as being retired in the conventional sense, while 71 percent are still employed. Of those currently working, the largest number or nearly a quarter (23%) hope to work as long as they are able to, followed by 20 percent who plan to gradually scale back; another 20 percent who plan to pursue personal interests and passions, and 18 percent to work part-time, with six percent exploring alternative careers.

Source: Bell Investment Advisors News Release (June 10, 2008)

Study: Boomers Can Boost Savings and Economy by Postponing Retirement

A study by McKinsey Global Institute (MGI) finds that while a vast majority of U.S. Baby Boomers are unprepared for retirement, "enabling them to work longer would significantly benefit both individuals and the broader economy." However, for this to happen both policy makers and business leaders will need to take action. Specifically, by increasing the median retirement age by about two years--from the current 62.6 to 64.1 by 2015—-the share of unprepared boomer households could be halved from 62% to 31%, and the additional workers would boost real GDP growth.

Working longer will generate $12.9 trillion more gross domestic product (GDP) between now and 2025 than would occur under the baseline forecast.

MGI's survey of Boomers' attitudes on retirement shows that 85 percent expect to work later in life. However, there are significant legal and institutional barriers that need to be overcome. They include a variety of disincentives for both employers and older workers, including the costs of America's health care system, the unintended consequences of labor laws and pension regulations, and corporate attitudes toward older workers. The research highlights several areas for action for policy makers and businesses to prevent the Boomers' retirement from becoming a multidecade-long drag on U.S. growth.

Source: McKinsey & Company "Talkin' 'bout my generation: The economic impact of aging U.S. Baby Boomers" (June 2008)

Research: Rising Health Care Costs Linked to Delayed Retirement

The Urban Institute's Retirement Policy Program has published a research article showing that older workers who expect high health care costs for themselves or their spouses after age 65 retire about later than those who expect low costs--13 months later if the worker is a man, 12 months later if a woman.

As Richard W. Johnson, Rudolph G. Penner, Desmond Toohey, the authors of "Rising Health Care Costs Lead Workers to Delay Retirement" point out, for those receiving health insurance from their employers, continued work reduces the risk of high out-of-pocket health care costs and increases retirement incomes--by raising earnings, boosting Social Security and employer sponsored pension wealth, improving the ability to save, and reducing the years over which retirement wealth must be spread--and therefore makes health care costs more affordable.

Source: Urban Institute Publication Release (May 18, 2008)

Research: Employees without Other Health Insurance Less Likely To Retire

A Watson Wyatt analysis of retirement data finds that older workers without other health care insurance options are more likely to defer retirement to stay covered under their employer’s plan. While other factors, such as whether an employee has a pension, also contribute to decisions on when to retire, "employees who rely on their employers for health care coverage and do not expect to receive employer-provided health benefits in retirement are 16.5 percentage points less likely to retire in any given year than workers with access to health care coverage through another source."

The Watson Wyatt analysis--"Predictive Factors for Retirement Timing"--was made on data collected from 1992 to 2004 as part of the University of Michigan’s Health and Retirement Study. Factors other than health care which influence retirement decisions include:

• Retirement plan types. Having only a defined benefit increases the likelihood of retirement by 4.1 percentage points.
• Public policies. The gradual increase of the age at which workers can retire and receive full Social Security benefits from 65 to 67, workers born in the 1940s are less likely to retire early than those born in the 1930s.
• Household wealth. While workers’ household financial wealth obviously has an effect on their retirement decisions, the source of the wealth also makes a difference. For example, a $100,000 increase in expected income from a pension plan is more likely to prompt earlier retirement than an increase in housing equity.

Source: Watson Wyatt Worldwide Press Release (May 7, 2008)

U.S. Economic Troubles Leading to Delays in Retirement

Writing for the Wall Street Journal, Jennifer Levitz reports that "many aging Americans are delaying retirement, electing labor over leisure in uncertain times" as the falling real-estate and stock markets erode their savings. Among other things, she notes how as houses decline in value, fewer people feel confident enough to retire, even if they plan to continue living in them, and as the stock market declines, older workers don't have years to make that up. As a result, they worry that their investments will diminish to the point that they won't have enough money to get through retirement.In addition to anecdotal evidence, she writes:

In February, the proportion of people ages 55 to 64 in the work force rose to 64.8%, up 1.5 percentage points from last April. That translates to more than an additional million people in the job pool, according to the U.S. Labor Department. The ranks of those 65 and over in the work force rose to 16.2% from 16% in the same time span -- meaning 212,000 more hands on deck. So far, the numbers for March continue to show a "sharp" increase, says Steve Hipple, a department economist.

Levitz also reports that investment advisers and retirement planners at more than a dozen firms "say they are seeing large numbers of older workers put off retirement as the housing and stock-market troubles have deepened."

Source: Wall St. Journal "Americans Delay Retirement As Housing, Stocks Swoon" (April 1, 2008); also reprinted in Atlanta Journal Constitution (April 1, 2008)

United Kingdom: Survey Shows Workers Becoming More Interested in Working Past 65

Nearly 2 in 5 workers (38%) currently aged 50 to 64 plan to carry on working beyond 65, according to a survey conducted by Chartered Institute of Personnel and Development (CIPD). This would represent a significant increase, as currently only 11% of the United Kingdom workforce work beyond State Pension age.

In addition, the survey found that of those who are not planning on working past 65, 31% would change their mind if their employer allowed them to work flexibly and another fifth say that they would be tempted to carry on working past 65 if they were offered a deferred larger state pension.

Charles Cotton, CIPD reward adviser, "On one level the survey findings look very positive, in that they show a strong demand for working beyond retirement age that is as much down to financial as other reasons such as individuals wanting to use their skills and experience. However, it is clear that Government policy could do more to encourage more older workers to stay on by extending the right to request flexible working beyond parents and carers and making pension arrangements more flexible."

Source: Chartered Institute of Personnel and Development Press Release (January 25, 2008)

Survey: Vanguard Research Shows Continued Work Figures Large in Retirement Planning

The Vanguard Group's The Vanguard Center for Retirement Research has published "Six Paths to Retirement", which highlights the importance of financial preparation and saving in determining the transition from work to retirement: While those with the financial resources look forward to possible paths with a flexible work arrangement or no work at all, for those who are short on retirement savings, work in some form will play an important role in helping close the savings gap.

The report is based on both a quantitative survey of some 2,500 adults age 40 to 69 and on in depth interviews with 38 men and women, age
40 to 75. From the larger survey, Vanguard reports 6 in 10 Americans say that their retirement plans include part-time or full-time work, with "downshifting" being a common strategy for making the transition from work to retirement--that is, older workers shift to less stressful or simpler jobs before stopping work entirely. From both parts of the research, Vanguard identified six paths to retirement among Americans 55 and older:

• Early retirees: 29% retired early. In most cases, this group had pensions and high savings balances.
• Work and play: 12% left full-time work in their 50s, but immediately set up their own companies or took on high-level, part-time jobs. They largely enjoy their work and want to stay active.
• Still Working: 35% of workers moved to part-time or self-employment in their 60s. They tend to have lower financial resources, and often lack a pension.
• Returnees: 5% stop working, typically in their 50s, and then are forced to return to the work force, sometimes because of a financial shock like the death of a spouse.
• Spouse's retirement: 9%. Often married women in excellent health, they follow their husband into retirement in their 40s and 50s.
• Never retire: 10%. The majority say they do it to meet basic living expenses.

Source: News Release The Vanguard Center for Retirement Research (January 17, 2007); Associated Press "Retirees Work for Fun or Necessity" (January 18, 2007)

Role of Employers in Discussing Retirement Options with Employees

In an article in Employee Benefit News, Lydell C. Bridgeford discusses the pros and cons about how employers talk about retirement education programs, especially ones addressing the financial pros and cons to working past age 62 to 67. While older workers thinking about working past the required retirement age must balance the rewards with the penalties and need information about the costs and benefits, there is a real question about whether employers should become more active in offering education programs on delayed retirement.

[John] Young [ executive vice president of sales and marketing at Michigan-based Freedom One Financial Group] observes that employers tend to leave retirement financial education up to outside professionals whom workers have already chosen, or a potential service provider of their 401(k) program that includes retirement education planning as part of the basic service.

However, it can be in the employer's interest to help with the education, especailly as younger workers become relatively more scarce and employers increasingly want to retain older workers.

Source: Employee Benefit News "Educating workers about delayed retirement" (November 2006)