South Korea: Government To Seek to Encourage Earlier Retirement to Boost Younger Workers

Writing in the JoongAng Daily, Jung Ha-won reports that the South Korean government is intensifying pressure on state-run companies to shed more employees before they hit retirement age to open the door for younger workers. part of its efforts to prop up the job market. The Finance Ministry is expected to unveil guidelines to discourage state-run enterprises from taking advantage of the current system to keep all their older workers on the payroll, instead of keeping only a select few senior workers deemed absolutely necessary.

“Extending the retirement age for all employees can block new employment opportunities for youth and deal a blow to the labor market,” said one Finance Ministry official who declined to be named. “We are preparing guidelines to fend off thoughtless attempts to extend retirement ages.”

Source: JoongAng Daily "Gov’t to tighten older worker policy" (February 25, 2010)

Utah Issues Career Guide for Older Workers

Utah's Department of Workforce Services has published a career guide for older worker. Designed to meet the special needs of older workers, Workers Over 50 is a supplement to the main adult career guide from DWS, Utah Careers, and includes articles covering topics such as "Myths about older workers," "Staying current in skills and knowledge," and "Finding employment after age 50."

"As the baby boomers approach retirement age, some are choosing to retire at 65 or even earlier. Many others will continue to work long after they could retire. Some will retire, then decide, for a variety of reasons, to go back into the workforce," says Lecia Langston, contributing author of Workers Over 50. "There are many factors to consider for whatever path is chosen. This publication is meant to help with these decisions and with other issues and questions workers over 50 grapple with."

Source: Utah Department of Workforce Services News Release (February 22, 2010)

France: Government Looks to Pension Reform

News reports state that French President Nicolas Sarkozy has said that a bill on reforming the costly pension system would be ready by September, with one option being raising the retirement age. This will be a challenge with much popular opposition being documented.

According to an Ifop poll for newspaper Dimanche Ouest-Francea, 59% of French oppose a rise in the retirement age. In addition, another poll from BVA for broadcaster Canal+ showed that French workers and students on average expect to retire at 62, higher than the current age but earlier than in comparable European economies such as Germany, where the retirement age is 67.

Sources: Reuters "France tackles explosive debate on pension reforms" (February 17, 2010); BBC "Nicolas Sarkozy to introduce French pension reforms" (Feburary 16, 2010)

Australia: Boosting Older Workers Important Feature of Third Intergenerational Report

The Australian Government had issued the Third InterGenerational Report addressing many issues as it looks towards 2050, by which time the number of people aged 65 to 84 years will have more than doubled and the number of people aged 85 and over will have more than quadrupled.

In his speech introducing the report, Wayne Swan, the Treasurer of the Commonwealth, focused on areas with respect to the aging workforce: increasing productivity and increasing participation. Responding to declining productivity, Swan said "And the best way to grow the economy is to maintain our focus on productivity, on investing in skills and infrastructure--nation building, the Education Revolution and regulatory and tax reform to underpin productivity growth in the decades to come." However, acknowledging that this is not enough, Swan said that "we need to keep encouraging workforce participation."

There has been a tendency in previous reports to present the ageing of the population only as a problem to be solved.

I prefer to focus on how we can best harness the life experiences and intellectual capital of older Australians. These are Australians who have already made a massive contribution to our nation. Their experience is invaluable.

Many will choose to leave the workforce, and enjoy a well-earned retirement, for a variety of reasons. But if they want to work they should be welcomed into the workforce.

Australia has a lower rate of mature age participation than other comparable countries – like the US, UK, Canada and New Zealand. There is considerable room for improvement in this area.

Groups like National Seniors Australia – and it's good to see Everald Compton here today – have identified a range of issues that we need to consider – including raising community awareness, encouraging skills development and promoting healthy workplaces.

If we can remove the obstacles for older Australians who want to work, we not only improve the quality of their life but we also strengthen the economy. That's what our Budget changes to the work bonus were all about.

The choice for older Australians to stay in or leave the workforce should be just that – a choice, not something forced on them by prejudice or bad policy.

Sources: Treasurer of the Commonwealth of Australia Speech (February 1, 2010); The Australian "Inconvenient truth on ageing" (February 4, 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)

Senate Aging Committee Takes on Older Worker Issues

Following the release of GAO's report of federal government hiring of older workers, Senator Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, joined by several other Senators, has introduced three bills to make it easier for older Americans to either reenter or remain in the workforce. In addition, the Committee has held a hearing to examine how the poor economy is affecting those nearing retirement.

The proposed legislation includes: (1)"The Older Worker Opportunity Act of 2009," which would diminish the barriers to part-time work for older workers, such as loss of health coverage and decreased pension benefits, by providing a tax credit for employers that employ older workers (age 62+) in flexible work programs, (2) a bill (S. 469/H.R. 1198) to make it easier for the federal government to rehire federal retirees part-time, without forcing the employee to reduce their salary by their pension amount, as under current law, and (3) a bill to allow phased retirement for federal employees under the Civil Service Retirement System. In addition, Kohl has reintroduced the "Health Care and Training for Older Workers Act of 2009" (S. 281), which would extend COBRA health insurance from the time of retirement (ages 62 and up) until seniors become eligible for Medicare at age 65.

At the Committee hearings on "Boomer Bust? Securing Retirement in a Volatile Economy," testimony was provided on "the economic downturn’s effect on retirement security, particularly for those who are on the brink of retirement. Witnesses at the hearing offered insight into the myriad factors that are affecting the ability of baby boomers to retire, including the weakened performance of 401(k) funds, the instability of housing values, and the challenges of the labor market for older workers, all of which are contributing to diminished prospects for a secure retirement."

Sources: U.S. Special Committee on Aging Press Release (February 24, 2009); Press Release (February 25, 2009)

Urban Institute Issues Policy Brief on How To Help Older Workers Find and Retain Jobs

The Urban Institute Retirement Policy Program and Health Policy Center has issued a policy brief to address the uncertain retirement future that older Americans are facing, focusing on policies needed to shore up Social Security and Medicare, get health care spending under control, and make staying in the labor force at older ages easier, while still protecting disabled workers.

According to "It’s Not Easy Being Gray: The New Rules of Retirement", the recession, changing mixes of retirement programs, and other changes are creating a retirement dilemma that will affect all Americans, not only those nearing retirement. "Workers will be expected to finance a large share of the bill for retirees: fixing government retirement programs could require higher tax burdens for everyone."

The Center convened a roundtable of experts in retirement, aging, health, and long-term care policy, who outlined a number of policy implications, including:

• Because older adults will likely have to postpone retirement and work longer, public policies that encourage early retirement need to be rethought, like the Medicare secondary-payer rule that requires employers—not Medicare—to cover most health care costs for workers age 65 and older.
• Older workers, especially low-income seniors, could benefit from employment services focused on connecting them to jobs and training.
• Older workers may be more willing and able to stay employed if they could work flexible schedules, but since employers in a slow economy may not embrace such options as job sharing, extended leave, and phased retirement, the public sector could step in and take the lead.
• More service providers will be needed as the nation grows older; for example, seniors aged 80 and older will need home care and other services that help them remain in their communities. Younger seniors in good health and with free time could be part of the solution, helping staff the jobs that serve the oldest old.

Source: Urban Institute Retirement Policy Program and Health Policy Center Abstract (February 17, 2009)

Canada: Study Finds Current Economic Downturn Will Not Solve Demographic Problems; Governments Must Switch Gears

The current economic slowdown may help ease, but will not stop the coming shortage of
available workers in Nova Scotia, specificially, and in Canada, generally. According to the report "The Developing Workforce Problem: Confronting Canadian Labour Shortages in the Coming Decades" prepared by Dalhousie University Professor Emeritus Dr. Jim McNiven for the Atlantic Institute for Market Studies (AIMS), Canada would need "a sustained recession over some 20 years to cope with the demographic crunch we have created for ourselves."

The combination of the baby boom generation aging and hitting traditional retirement age, the decline in birth rates, the failure of immigration to pick up the slack, and stagnant productivity mean that government policy must be overhauled. Programs that helped boomers, such as job creation, employment insurance, and nearly retirement all helped open jobs for the boomers are no longer what is needed. Instead, McNiven suggests a combination of approaches to alleviate the pending crisis:

• better immigration and child care policies to increase the population;
• encourage an increase in the productivity rate; and
• increase the labour force participation rate by reaching out to segments of the population with traditional low rates and encourage people to stay working beyond "Freedom 55."

Sources: Atlantic Institute for Market Studies Media Release (January 7, 2009); Halifax Chronicle Herald "Freedom 85, or why you’ll work forever" (January 10, 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: Government Acts To Encourage Small Businesses To Retain Older Workers

Australia's Department of Consumer and Employment Protection and the Small Business Development Corporation have engaged in a process to encourage Western Australian business to employ mature age workers as a way to improve performance and boost the bottom line. Through publication of "Don’t rule out mature age workers," will help small employers struggling to compete with large enterprises for skilled labor.

See also the Department of Commerce site Mature age employment for other information for employers and employees.

Source: Department of Consumer Media Statement (December 16, 2008)

Research Study Evaluates Government Programs in United States Helping Older Workers Obtain New Skills

A report by Heldrich Center researchers Carl Van Horn, Ph.D. and Maria Heidkamp reviews the federal government resources available to assist older unemployed job seekers and highlights examples of initiatives undertaken by states, community colleges, nonprofits and community-based organizations, and the private sector to help older workers find another job.

The study, also published as an issue brief by the Sloan Center on Aging & Work--"Older and Out of Work--Employer, Government and Nonprofit Assistance"--follows up on their earlier work. Among their conclusions is that only a small percentage of older unemployed workers will receive post-layoff assistance from their former employer and that finding that next job is likely to be difficult and time consuming--considerably more so than for younger job seekers—-and may require them to prepare for a new
career in a new industry.

While some primarily large employers do provide employees sufficient advance notice of a layoff and access to a range of outplacement and other services, small and mid-sized employers may not have the resources to offer post-layoff benefits. "They may need to seek opportunities to partner with government and nonprofit agencies in order to provide assistance to their older workers targeted for layoff. These opportunities may include participating in regional talent and skills alliances and sector strategies."

Source: John J. Heldrich Center for Workforce Development Home Page (October 16, 2008)

Singapore: Tripartite Implementation Group Launches Re-employment Web Portal

Singapore's Tripartite Implementation Workgroup (TIWG) has launched a web portal to help employers and employees get started on re-employment before the reemployment legislation takes effect in 2012. The portal can be found at www.re-employment.sg and it is intended to serve as a one-stop information and resource center for employers and employees on re-employment.

Among other things, the portal includes case studies of companies that have successfully implemented re-employment, lists seminars and workshops on re-employment, and provides information on assistance programs for companies that may require additional resources to implement re-employment. The portal also lists the workforce age profiles of over 250 companies from sectors such as hotels and restaurants, manufacturing and wholesale and retail trade; these companies have voluntarily posted their workforce age profiles on the portal in support of age-friendly and fair employment practices.

Source: Ministry of Manpower News Release (August 13, 2008)

New York: Mature Worker Task Force Issues First Report

New York's first annual Mature Worker Task Force Report to the Governor and the Legislature has been released. The report reflects the Task Force's background research, draft of overarching goals and objectives to frame the work of the Task Force, and identificattion of potential actions to explore with the full Task Force in the upcoming years. This preparatory work will be used as a starting place for the work of the full Mature Worker Task Force, which is scheduled to begin in the fall 2008 when full Task Force membership is anticipated to be in place.

The report identifies the Task Force's overarching purpose: "To improve economic development and the economic security of older adults through opportunities that recognize the value of mature workers and also seek to retain, retrain and offer second careers that will fill anticipated areas where there will be a labor deficit."

With respect to goals, the Task Force will address workforce shortage and workplace flexibility issues, expand employment opportunities for mature workers, and address age discrimination in the workplace. The four primary have been identified as (1) identify best practices for hiring, retaining, and retraining mature workers; (2) identify and address statutory and regulatory provisions limiting opportunities for mature workers; (3) serve as a clearinghouse for information for businesses seeking to hire mature workers and for mature workers seeking employment; and (4) assess effectiveness and cost of mature worker-related programs New York State has implemented.

Source: Mature Worker Task Force Report (July 29, 2008)

Commentary: Proposals to Change U.S. Benefits Laws to Account for Worker Longevity Increases

John Turner, coeditor of "Work Options for Older Americans", has written an article on "Work Options for Older Americans: Employee Benefits for the Era of Living Longer" published in the Third Quarter 2008 issue of Benefits Quarterly. According to Turner, "[m]any of our social policies and employee benefit policies were designed for an era when people had shorter life expectancy," so that "[w]ith the demographic changes occurring, it is time to reexamine those policies to fit the realities of the new demographic era of living longer."

Public policy should provide older people with more choices, rather than fewer. Work effort by the elderly that is all "push" (due to financial need) and no "pull" (due to attractive jobs) is not socially acceptable. Thus, an increase in labor force participation by the elderly that is motivated mainly by a drop in their reservation wages (the minimum wage at which they are willing to work) because of decreases in pension income would not be an acceptable development. Much more acceptable is the idea that workers who may have to supplement their pensions are also induced to work because of attractive wages, employee benefits, flexible work hours or the nonpecuniary aspects of work. Some of the attractive nonpecuniary aspects of work for older people include socialization, structure to the day and self-esteem. Others include shorter hours, greater vacations and greater flexibility in work schedules.

Among other things, Turner suggests that, since it is difficult for workers to collect a pension while phasing out work, the government could take a proactive stance towards flexible employment and provide guidance to employers, who are chary of experimenting under threat of losing their tax deductions. Another suggestion, reflective of increased longevity, to help encourage defined benefit plans, is to allow employers to index initial benefits received at retirement to increases in life expectancy.

Source: Benefits Quarterly "Work Options for Older Americans: Employee Benefits for the Era of Living Longer" (July 31, 2008)

Governors Association Encouraging States To Engage Seniors in Volunteering and Employment

New York has been selected by the National Governor's Association as one of six states to participate in a Policy Academy sponsored by the Association that will address issues related to engaging the elderly in volunteering and employment opportunities in the future. According to the Center for Best Practices of the National Governors Association, the goal of the initiative is to improve the health and lives of older Americans by substantially increasing the proportion of seniors who participate in employment, education and training, or meaningful volunteer activities. Idaho, Illinois, Maryland, Massachusetts, and Pennsylvania are the other states being awarded grants.

The goals of the team appointed by New York Governor Patterson are to:

• Develop a strategic plan to increase employment and volunteer opportunities for older adults.
• Ensure that older adults can age with dignity and respect in their communities with volunteer support from their peers.
• Create a unified communication strategy and educational campaign to promote civic engagement among older New Yorkers and highlight the benefits and contributions they can make in the work force and voluntary endeavors.

Sources: New York State Office for the Aging Press Release; Watertown Daily Times "Grant to help older workers find volunteer and paid jobs" (July 21, 2008)

France: Government Announces New Measures on Employment of Older Workers

Christine Lagarde, Minister of Economy, Industry and Employment, Xavier Bertrand, Minister of Labour, social relations, family and solidarity, and Laurent Wauquiez, Secretary of State for Employment, have announced a series of measures adopted at the end of the consultation with social partners on the employment of older workers. The main objectives are to:

• encourage businesses and industries to conclude agreements to keep or recruit older workers,
• encourage older people to extend their work beyond 60, and
• promote the return of seniors to work.

One of the principal means of pushing the agenda will be to require businesses and industries that have not concluded agreements on age management and employment of older workers by December 31, 2009 to begin paying additional retirement contributions in 2010. In addition, the ministers stated that age should no longer be a reason for an employer to terminate the employment contract.

To encourage workers to stay in the workforce, the measures call for allowing
cumulative employment and retirement without restriction at age 60 if on full retirement and at age 65 in all cases and for the elimination of the six-month waiting period for resuming work with the same employer.

Source: Ministère de l'Économie, de l'Industrie et de l'Emploi Press Release (June 26, 2008)0

Report Tracks Governmental Action on Workplace Flexibility

A report prepared by Institute for Women’s Policy Research (IWPR) and the Center for WorkLife Law at the University of California Hastings College of the Law reviews actions being taken by 21 high income countries aimed at increasing workers’ ability to change their working hours and arrangements to balance work and family, and facilitate lifelong learning and gradual retirement. According to "Statutory Routes to Workplace Flexibility in Cross-National Perspective", high-quality flexible work arrangements are still the exception in the U.S.

While the IWPR is primarily focused on laws enabling women to remain in the workforce, it found that 11 of the 21 countries surveyed allow reduced hours with partial pension prior to full retirement. Thus, for example, in Finland, from age 58 onwards, a reduction of usual full-time hours between 30% to 70% is possible with partial pension payments.

Source: Institute for Women’s Policy Research News Release (May 28, 2008)

Ohio Establishes Senior Civic Engagement Council

Ohio Governor Ted Strickland has established the Ohio Senior Civic Engagement Council to work to enhance volunteer, educational and employment opportunities for older Ohioans. Strickland said that "[t]he Council will work to keep them active and engaged in their communities and careers, as well as help employers prepare for changing workforce needs."

Among other things, the Council will coordinate with the Ohio Workforce Policy Board regarding senior employment policies and activities, collect data about the engagement of older adults in employment, and promote policies that enhance job opportunities available to older Ohioans. In addition, it will help business leaders and the workforce development system prepare for and offer services to Ohio’s growing number of older workers.

Source: Ohio Office of the Governor Press Release (May 20, 2008)

Additional Source: The (Lorain, OH) Morning Journal "Senior civic engagement council smart new policy to help Ohio move ahead" (May 21, 2008)

Japan: Government Falling Short in Ensuring that Employers Hire Older Workers

Kazuo Otsu, writing for the Daily Yomiyuri, examined whether the Japanese government is making good on its goal of a society in which people can continue to work regardless of their age. Japan's steps in this plan have included enforcing the revised Older Persons' Employment Stabilization Law in April 2006, under which companies are obliged to ensure there are job opportunities for workers up to the age of 65, effective April 2013, and implementing the revised Employment Measures Law to prohibit companies in principle from setting age limits for the recruiting of new employees.

According to Tomonari Higuchi, a business consultant in Yamagata Prefecture, "he often hears personnel managers referring to the difficulty of hiring aged workers."

"There's a remarkable number of people who feel they are treated like redundant baggage," said Higuchi, 51. "While there has been progress on a legislative level, in general the genuine intent of companies to hire elderly workers remains low."

Otsu notes, for example, that one job-seeker in his t0's was told "We only have young employees working here" when telephoning a company offering jobs stating no age limit.

Some employers openly admitted that not indicating an age limit was just a matter of expediency. Though the government can issue warnings to companies found to be flagrant transgressors of the law banning most age restrictions, the law itself has no penalty clauses.

Source: Daily Yomiyuri "Work for elderly remains elusive goal" (May 8, 2008)

Massachusetts: Policy Brief Calls on State Leaders To Capitalize on Coming Age Wave

The Boston College Center on Aging & Work and AARP have issued a policy brief calling on Massachusetts state leaders to include 50-plus workers in the mix as the state develops solutions to stimulate its sagging economy. The policy brief--21st Century Age Demographics: Opportunities for Visionary State Leadership--provides information to help state leaders nationwide examine the connection between aging and work, and how changes in the labor force participation of older adults will affect their states.

“State leaders must play an active role in developing policy and initiatives to capture the value of 50-plus workers,” says Marcie Pitt-Catsouphes, co-director of the Center on Aging & Work at Boston College. “Most of the attention paid to the aging of the workforce has focused on national trends. However, the thought leadership for economic and workforce development occurs at the state level.”

Among other things, the policy brief suggests raising awareness, encouraging business leaders to respond, expanding resources, benchmarking progress, and positioning Massachusetts as a model employer as ways in which to to advance public sector innovation and increase employment options for 50-plus workers.

Source: Center on Aging & Work at Boston College Press Release (April 2, 2008); AARP Massachusetts News Release (April 2, 2008)

Poland: Government Seeks Incentives To Keep Older Workers Working

According to press reports, the Polish government has proposed incentives aimed at motivating 50+ year-olds to become more professionally active. These would include promoting professional retraining programs to match job market demand and tax relief for employers offering work to people over 50.

Currently, only 28$ of people over 50, while the other 72% are retired, claim disability or early retirement benefits.

"Deputy labour and social policy minister Czeslawa Ostrowska has said that businesses employing people over 50 would be exempted from obligatory contributions to the Labour Fund and would only have to pay for the first 14 days of medical leave compared with the obligatory 33 days under the current law."

Source: Nowe Media, Polskie Radio S.A "Government encourages older workers to work longer" (February 22, 2008)

Other Sources: Pravda "Poland's new premier: firms must employ older workers, too" (November 29, 2007)