Survey: Workers More Optimistic about Retirement, but More Contemplating Phased Retirement

The Transamerica Center for Retirement Studies® has released the results of its annual retirement survey, which found increased optimism among workers around the world about improvements in their local economies, but also noted that many workers envision some kind of phased transition into retirement. According to "The Changing Face of Retirement—The Aegon Retirement Readiness Survey (2014)," just 32% of workers surveyed plan to immediately stop working and fully retire. In the United States, this number is just 24%, while in European nations, which which have histories of compulsory retirement, workers are more likely to plan to stop immediately: for example, , 52% in Spain and 51% in France.

Employment and government policy reforms are needed to facilitate this new approach to retirement, yet change is not catching up with worker demand: only 23 percent of workers say their employers facilitate transitioning from full-time to part-time. Even fewer U.S. workers (21 percent) indicate their workplace policies accommodate the transition. In many cases, change in labor and pension laws, as well as a change in cultural norms, are needed to facilitate implementation of a phased retirement program.

The Aegon Retirement Readiness Survey 2014 is a collaboration between the Transamerica Center for Retirement Studies and Aegon. The survey encompasses 16,000 employees and retirees in 15 countries, with separate country reports available for each of them: Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Sweden, Turkey, the United Kingdom and the United States. These countries were selected on the basis of their distinctive pension systems, as well as their varying demographic and aging trends.

Source: Transamerica Center for Retirement Studies® News Release (May 29, 2014)

Netherlands: OECD Report Calls for Greater Efforts Encouraging More People To Work Later in Life

The Netherlands must encourage more people to work later in life in order to help it meet its growing challenges of a rapidly aging population and rising social spending, according to the OECD. In its report "Ageing and Employment Policies: Netherlands 2014: Working Better with Age," the OECD says that while reforms over the past decade, such as raising the pension age, have already had an impact—so that the share of 55-64 year olds in work has increased significantly to just over 60% in 2013 (above the OECD average of 55%)—the Netherlands remains well behind the best OECD achievers, ranking only 16th for the employment rate of 55-64 year olds among the 34 OECD countries.

Among its recommendations, the OECD says the Netherlands should:

• promote longer contribution periods in second-pillar pension schemes and increase flexibility in withdrawal and combinations of pension and work to encourage longer careers;
  
• reduce the maximum duration of unemployment insurance benefits combined with better activation of all unemployment benefit recipients;
  
• keep replacement rates (the ratio of benefits to former earnings) of sickness and disability benefit well below 100%, and give access to wage-compensation already in the sickness benefit period for re-entry to new jobs with a lower wage;
  
• ensure that new practices among innovative firms in the Sustainable Employability program are promoted and progressively become national standards;
  
• mobilize more fully labor resources by supporting initiatives to facilitate working on a full-time basis for part-time workers.

Source: OECD News Release (April 16, 2014)

Update: Ministry of Social Affairs and Employment of the Netherlands Press Release (April 16, 2014)

Brookings Issues Report on Retirement Trends in 20 Industrialized Countries: Recession Accelerating Delayed Retirements

A report from the Brookings Institution finds that since Great Recession, the trend toward later retirement in industrialized countries has not only continued, but has accelerated. According to "Impact of the Great Recession on Retirement Trends in Industrialized Countries," by Gary Burtless and Barry Bosworth, when the recession began most rich countries were experiencing an increase in labor force participation rates after age 60. In their paper, they examined whether the downturn slowed or reversed the trend toward higher old-age participation rates, using straightforward time series analysis to test for a break in labor force trends after 2007.

Averaging across all 20 countries in our sample, the pace of labor force participation gains has accelerated since the onset of the Great Recession. As noted, the participation rate of 60-64 year-olds increased at an average rate of 0.4 percentage points a year between 1989 and 2007. Between 2007 and 2012 the participation rate in this age group increased an average of 1.5 percentage points a year. In 12 of the 20 countries, the increase in the trend rate of participation change was statistically significant. The participation rate of 65-69 year-olds increased at an average rate of 0.1 percentage points a year between 1989 and 2007. Since 2007 the participation rate in this age group has increased an average of 0.8 percentage points a year across the sample countries. In 13 of the 20 countries, the rise in the trend rate of participation gain was statistically significant. In the oldest age group, 70-74 year-olds, the trend rate of increase in participation rose from 0.05 percentage points a year between 1989 and 2007 to 0.32 percentage points a year after 2007. In 12 of the 19 sample countries the increase in the pace of participation gain among 70-74 year-olds was statistically significant.

While countries that experienced unusually severe downturns, including Ireland and much of southern Europe, represent exceptions to this generalization, the authors conclude that, on the whole, however, the trend toward later retirement in rich countries has not been reversed as a result of the Great Recession.

According to Robert Samuelson, this study suggests that the "We may be witnessing the last gasp of early retirement" and not just in the United States.

Source: Brookings Institution Paper (December 16, 2013)

OECD Issues Reports on Country Initiatives To Stimulate Employment of Older Workers Since 2005

In a series of country notes, the OECD has evaluated the impact of recent policy reforms and measures to boost job opportunities for older workers in 21 countries which participated in the OECD 2003-05 review of ageing and employment policies. According to the OECD:

The data show a steady increase over the past decade of the employment rate of people aged over 50 in the OECD area, from 55.6% of 50-64 year-olds in 2001 to 61.2% at the end of 2011. At the same time, the effective age at which people retire has increased slightly: for men, from 63.1 in 2001 to 63.9 in 2011 and for women, 61.1 in 2001 to 62.8 in 2011. The data also reveal a striking difference in 2011 between countries in the share of people aged over 60 still working: from 63.4% in Sweden to 14.2% in Hungary (see data for countries below).

In 2006, OECD issued its report "Live Longer, Work Longer" in which it recommended steps to:

• Strengthen financial incentives to carry on working and reducing incentives to retire early;
• Tackle employment barriers on the side of employers, such as increasing awareness of anti-age discrimination laws; and
• Improve the employability of older workers, such as boosting the incentives for job centres to place older unemployed job seekers in work.

More detailed analysis will become available in a chapter of the 2013 Employment Outlook in June 2013. In addition to the 21 country reports linked below, OECD issued a scorecard on older workers  in 34 OECD countries.

• Australia
• Austria
• Belgium (in French)
• Canada (forthcoming)
• Czech Republic
• Denmark
• Finland
• France (in French)
• Germany
• Ireland
• Italy
• Japan
• Korea
• Luxembourg (in French)
• Netherlands
• Norway
• Spain (in French)
• Sweden
• Switzerland (in French)
• United Kingdom
• United States

Source: OECD Ageing and Employment Policies (October 17, 2012)

Netherlands: Report Shows Older Workers Not Getting Hired

UWV's annual report of Dutch vacancies shows that only two percent of vacancies in 2011 were filled by workers 55 and over. The report ("Vacatures in Nederland 2011") also states, among other things, that the proportion of companies workers over 55 in service decreased to 54% from the 60% indicated by companies surveyed in 2010.

In response, UMV says that it will make 150 additional coaches available working for free as guides for older workers.

Source: UWV Press Release (March 6, 2012)

Netherlands: Employer Support for Older Workers, but Not for Those Over 65

The Netherlands Institute for Social Research (SCP) has issued a report showing how personnel policy has changed in the Netherlands over the last ten years, describing, among other things, the trend in the inward and outward movements of staff in various sectors, mapping out developments in remuneration, training and employees' work-life balance, and devoting particular attention to the policy on older workers.

One focus of the study, "Demand for Labour [Vraag naar arbeid] 2011," was to look at the extent to which employers have taken up government recommendations and see if employers are taking a more positive view of older workers if the costs of employing this group are reduced. The results were mixed, with employers looking more favorably on workers over 60, but not workers over 65.

With respect to the first group, between 2001 and 2009, the number of employers who consider it good for their organization that employees should continue to work beyond the age of 60 rose from 41% to 55%, employees themselves have become more positive on working beyond the age of 60. "More than half the employers in virtually all sectors now regard it as desirable that employees should continue working beyond age 60. The only exception is the education sector, where only 43% of employers were in favour of this in 2009."

However, "support for continuing to work beyond the age of 65 years is low among both employers and employees; in 2009, only 15% of employers considered staff working beyond the current retirement age to be good for their organisation, while sup- port among employees was just 14%." However, the report took a positive spin even on this:

This suggests that there is still a long way to go in generating sufficient support to raise the retirement age. This does not appear to be an impossible task: after all, support for working beyond the age of 60 has also increased over the last decade. It may be that the norms as to when an employee is considered ‹too old› will to some extent shift of their own accord as the state retirement age rises and the labour force ages.

Sources: SCP Press Release (Feburary 14, 2012); DutchNews.nl "Employers do not want older workers" (February 14, 2012)

Research: Investigators Report on Worker Disengagement before Retirement

A paper published by Dutch researchers following a panel study finds that, in line with the notion of the preretirement disengagement process, many older employees disengage more from work when getting closer to their planned retirement age. However, according to "Do Older Workers Develop a Short-Timer’s Attitude Prior to Retirement?" written by Marleen Damman, Kène Henkens, and Matthijs Kalmijn, career experiences of promotion and employer change slow down the disengagement process, while Declining health, in contrast, accelerates the process.

The aim of the study was to improve understanding of work disengagement in the pre-retirement period, by examining the impact of proximity to planned retirement (anticipated future) and work, educational, and health experiences (lived past) on pre-retirement work disengagement.

The transition from work to retirement is a complex long-term process. This study clearly shows that the preretirement work disengagement process already starts a couple of years before older workers retire and steadily increases when workers get closer to retirement. Also for workers who have passed their planned retirement age, relatively large increases in work disengagement were found.

Source: Social Science Research Network Abstract (December 21, 2011)

Generations of Talent Study: Effects of Country, Age, and Career Stage on Employes

The Sloan Center on Aging & Work at Boston College has published a study of employees' work experience, finding that those 40 years old and older are the most engaged and demonstrate the highest level of organizational commitment, and that those 50 years old and older are the most satisfied with their jobs. The "Generations of Talent Study" assessed the effects of country, age, and career stage among employees worldwide, based on work experiences from 11,298 individuals, working for seven multinational companies, at 24 worksites in 11 countries.

Among other things, the study found that employees working in young-developing countries (Brazil, China, India, Mexico, South Africa, Botswana) show higher levels of work engagement and organizational commitment than do those in the old-developed countries (Japan, the Netherlands, Spain, UK, U.S.). In contrast, job satisfaction levels are similar on average for employees working in the young-developing countries and in the old-developed countries. Dr. Marcie Pitt-Catsouphes, Director of the Sloan Center, noted that "[c]ontrary to popular opinion, older workers are the most engaged, and forward-thinking companies need to begin strategizing about how to capitalize on this asset."

In addition to an overall report on "Effects of “Old-Developed” versus “Young-Developing” Country Type and Age-Related Factors on Work Engagement, Job Satisfaction, & Organizational Commitment," the Sloan Center has published individual reports about the effects of country and age on employees for the following countries:

• Brazil
  
• China
  
• India
  
• Japan
  
• Mexico
  
• The Netherlands
  
• Spain
  
• United Kingdom
  
• United States

Source: Sloan Center on Aging & Work at Boston College News Release (December 1, 2011)

Netherlands: Government Introduces Bill To Facilitate Work after Age 65

The Dutch Social Affairs Minister, Henk Kamp, has introduced legislation designed to make it easier to work beyond the age of 65. Under the draft bill, employers will be allowed to extend temporary employment contracts for older workers beyond the current limit of two renewals.

Those over 65 will not be entitled to sick pay and employers will not have to take special steps to reintegrate them after sick leave. From 2013, employees will also be able to postpone their state pension for up to five years and receive a pension bonus of 6.5% for each year that they exceed the normal retirement age.

The bill is part of the agreements worked out by the Cabinet in June in the pension agreement made with employers and employees.

Source: Rijksoverheid (October 12, 2011)

Netherlands: Cabinet Endorses Proposal To Raise Retirement Age

According to news sources, the proposal of Netherlands' social affairs minister Henk Kamp to raise the official retirement age for the state pension from 65 to 66 in 2020 has been endorsed by the Dutch cabinet, so the proposal can now be submitted to parliament.

The impetus for the move is Holland's aging population and increased longevity. Current government population projections indicate that the present ratio of four workers for each pensioner in the Netherlands is expected to decline to two workers for each pensioner by 2040.

Sources: Investment & Pensions Europe "Dutch Cabinet supports raising state pension age to 66" (May 3, 2011); TAEN "Dutch Government Moves to Raise State Pension Age" (May 5, 2011)

Netherlands: Demographic Research on Age-Conscious HR Policies

According to Dutch researchers, generic policy measures that seek to accommodate older workers--for example, by offering them additional leave or reducing their workload--are often perceived and put into practice as "age conscious" personnel policies, but these actions appear to limit the opportunities of older workers, and very few organizations have personnel policies that are targeted at narrowing the growing productivity-wage gap.

In "How do employers cope with an ageing workforce? Views from employers and employees", Hendrik P. van Dalen, Kène Henkens, and Joop Schippers, used a survey of Dutch employers to examine how employers deal with the prospect of an ageing work force, and they supplemented their analysis with an additional survey of Dutch employees to compare human resource policies to practices.

Results showed that a small minority of employers are taking measures to enhance productivity (training programs) or bring productivity in line with pay (demotion). Instead, personnel policies tend to "spare" older workers by giving them extra leave, early retirement, or generous employment protection. Often, older workers who perform poorly are allowed to stay, while younger workers under similar conditions are dismissed.

Source: Demographic Research Abstract (June 4, 2010)

Netherlands: Social Partners Look to Raise Retirement Age to 66 by 2020

According to press reports, Dutch social partners have agreed on a flexible retirement age for second-pillar pensions and the state pension AOW by linking them to life expectancy, and the representative organizations of employers and employees said the retirement age should be raised to 66 in 2020, with decisions on further rises being made every five years.

The government, now collapsed, had proposed a rise of the retirement age to 67 in 2025 after earlier negotiations between the social partners broke down.

Under the agreed terms, workers are still allowed to retire at 65, but will receive 6.5% lower benefits, while working longer will entitle them to a 6.5% higher benefit for every additional year.

However, workers who are over 55 at the moment should still be able to retire at 65 for the full AOW benefit, the social partners added.

There are expectations that the agreement will become part of negotiations for a new government coalition after the elections. Further agreement among the employers and employees groups is still needed on increasing the perspectives of older workers on the labor market.

Source: Investments and Pensions Europe "Dutch social partners agree on retirement at 66" (July 7, 2010); Financial Times "Time to rethink wilting Dutch pension funds" (June 6, 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)

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)

OECD Report on Netherlands Includes Focus on Increasing Participation of Older Workers

The Organisation for Economic Co-operation and Development(OECD), in issuing its "Economic survey of the Netherlands 2008" making assessments and recommendations on the main economic challenges faced by the Netherlands, has specifically focused, among other things, on the role of older workers in the Dutch economy. Although it finds that it has made a strong comeback, the economy is now facing labour shortages, related to the greying of the population and the continued weak labour market-participation of several groups.

OECD recommendations include the adoption of incentives to increase participation in the labour market, including at older ages, so as to widen the revenue basis and, to encourage older workers, strengthen job search requirements and continue making the tax-benefit system more work-friendly.

In his remarkes at a joint press conference held with the Minister of Economic affairs, OECD Secretary General Angel Gurría said:

To further increase participation of older workers, the government should move ahead with its planned reforms and make them more encompassing. Particularly, the new levy on pensioners who stopped working before the official retirement age could be implemented faster and not be applied only to higher income levels. In addition, measures should be taken to reduce the possibility of using the unemployment benefit system, in combination with generous severance payments, as a transition into early retirement.

Sources: OECD Executive Summary (January 31, 2008); NIS News Bulletin " OECD Urges Netherlands to be Tougher on Welfare Recipients" (February 1, 2008)

Netherlands: Parliament Debates Plans To Boost Older Workers

According to news reports, in the context of a debate on the social affairs ministry budget,
members of the Dutch Parliament from across the political spectrum are drawing up plans aimed at boosting the percentage of older people at work. "Christian Democrat MPs want to combat the ‘negative image’ attached to older workers, news agency ANP reports. MP Eddy van Hijum, who is launching the CDA’s plan, says employers often mistakenly believe that older members of staff are less productive and take more days off sick."

In addition, Liberal party members propose scrapping the unemployment premium for employees over 55 and want an end to the age limit of 45 which has become the norm for jobs in the police force. Labour MPs want employers to invest not only in younger workers by making sure that all members of staff are legally entitled to extra training and are proposing a "no risk" policy for older workers which would free employers from paying sick benefits.

Source: DutchNews "MPs want boost for older workers" (December 11, 2007); "MPs back plan to boost older workers" (December 11, 2007)

Netherlands: Focus on Age Discrimination

According to an article in Expatica, age discrimination is increasingly prevalent, and less talked about in the Netherlands than other forms of discrimination.
Of the 694 complaints of discrimination submitted to the Dutch Committee for Equal Treatment (CGB) in 2006, 219 dealt exclusively with discrimination on the basis of age.

Older employees tend to be less likely to be promoted or invited for job interviews, even when their resume are similar or better to younger candidates, according to a recent CGB report.

In addition, companies that are forced to reorganise usually prefer to fire older employees first. Older employees are also the least likely to be offered outplacement programmes that help make a quick transfer to a different company.

While laws may help the older workers who do file complaints, some insiders say only economic need will end age discrimination; as the baby boomers retire, the larger work force requirements can only be realized if companies decide to retain their senior professionals.

Source: Expatica.com "'Older' workers in Holland facing age discrimination" (October 12, 2007)

Netherlands: Working Past Retirement Age

Ann-Marie Michel of Radio Netherlands interviews Ger Thielen, co-ordinating secretary of the Taskforce for Older People and Employment, to address the "ominous rumblings" in Dutch newspapers about fewer workers caring for more retirees who'll live longer than ever and expect top quality of life and the government's push for drastic changes to the pension system in a bid to keep people working longer. With automatic retirement at 65--or earlier--likely to be a thing of the past, Thielen says:

You're always too late, of course, and looking at the demographic developments, I think we seriously have to try to improve participation of many people in a lot of areas, otherwise this complex society will not survive.

Source: "Working past the retirement age" Radio Netherlands (February 28, 2005)