Friday, April 18, 2014

Australia: Study Finds Governments Not Doing Enough To Hire Older Workers

According to a study using Australian Bureau of Statistics and Census data, both federal and state governments in Australia lag well behind the private sector when it comes to employing older workers. In "Past, present and future of mature age labour force participation in Australia," the National Seniors Productive Ageing Centre highlights variations in rates of aging and mature age participation across the country.

National Seniors points in particular to a marked decline in the proportion of people aged 60 and over employed by governments, noting that around 16.4% of men aged 50 to 59 work across national, state and local bureaucracies, but this falls to 12.7% for men in their 60s, while women drop from 24.2% in their 50s to 20.1%. In contrast, private sector employment actually increases as people age.

According to National Seniors chief executive Michael O’Neill, “[t]he public service should represent the gold standard in hiring and retaining mature age staff. Instead, public servants aged over 60 are a rare breed across the country....When it comes to employing senior Australians, governments, both federal and state, get a big ‘F’”.

The report concludes that an aging workforce underscores the importance of addressing the barriers to mature age employment from age limits on workers compensation to discriminatory recruitment practices. In addition, the projected decline in the overall growth in labor supply over the next 30 years underscores the need for governments, industry and employers to recognize the importance of ongoing mature age participation.

Source: National Seniors Press Release (April 17, 2014)

Thursday, April 17, 2014

EBRI Reports that Women are Driving Increased Labor Participation by Workers 55 and Over in the U.S.

According to an EBRI report, older workers (those 55 and older) are a growing presence in the U.S. work force, a trend
driven mainly by women. The April 2014 EBRI Notes—"Labor-force Participation Rates of the Population Ages 55 and Older, 2013"—finds that the labor-force participation rate for those ages 55 and older rose throughout the 1990s and into the 2000s, and that, for those aged 55–64, the upward trend was driven almost exclusively by the increased labor-force participation of women. For men, the participation rate was flat to declining. For workers 65 or older, participation rates increased for both men and women.

EBRI attributes the upward trend in labor-force participation to workers’ current need for continued access to employment-based health insurance, as well as for the need for more years of earnings to accumulate savings in defined contribution plans and/or to pay down debt. It also notes that "[m]any Americans also want to work longer, especially those with more education for whom more meaningful jobs are available that can be performed into older ages."

The EBRI report is less clear about how differing participation rates affect the generations. Thus, younger workers’ labor-force participation rates increased when that of older workers declined or remained low during the late 1970s to the early 1990s. However, as younger workers’ rates began to decline in the late 1990s, those for older workers continuously increased. "Consequently, it appears either that older workers filled the void left by younger workers’ lower participation, or that higher older-worker participation limited the opportunities for younger workers or discouraged them from participating in the labor force."

Source: EBRI Press Release (April 16, 2014)

Wednesday, April 16, 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)

Wednesday, April 09, 2014

Research: Governments Need To Restructure Deferred Retirement Plans To Encourage Retention of Employees

A University of Missouri researcher concluded has that states may need to restructure deferred retirement incentives to encourage more employees to remain on the job longer and minimize the disruption to government operations. Using, as a case study, the state of Missouri’s Deferred Retirement Option Provision (BackDROP), Angela Curl, assistant professor in the University of Missouri School of Social Work, looked at how the large numbers of possible retirees—in Missouri, more than 25% of all active state employees will be eligible to retire by 2016—threaten the continuity, membership and institutional histories of the state government workforce.
Curl said that a good system of employee retention is inclusive, flexible and accounts for the wide range of circumstances that retirement-eligible employees may consider when deciding to defer retirement. These circumstances could include caregiving for older parents or having a spouse who is retired. In Missouri, BackDROP offers a one-time payment equaling 90 percent of what employees would have received in benefits for an additional five years of service as incentive to delay retirement.
Curl said that “[e]mployers need to ask if their organizations are designed to promote turnover or promote retention. . . . States should recognize the benefits of promoting retention. Using delayed retirement incentives to encourage retention is important, particularly when dealing with older employees.”

A paper—“A case study of Missouri’s deferred retirement incentive for state employees”—co-authored by Kirsten Havig, will appear in the Journal of Aging and Social Policy`. Among other things, the study also found that social demographics such as race, sex, level of education and marital status did not play a significant role in an employee’s decision to defer retirement.

Sources: University of Missouri News Release (April 3, 2014); Columbia Business Times "MU researcher examines options for aging workforce" (April 8, 2014)

Friday, March 28, 2014

Survey: Tower Watson Shows More Workers Planning on Delaying Retirement Past 70

Tower Watson's annual survey of employee attitudes towards retirement finds that at workers are especially worried about the affordability of health care in retirement, and significant numbers have been forced to cut back on spending and plan to delay retirement, many until age 70 or later. According to Towers Watson’s 2013/2014 Global Benefit Attitudes Survey, while 46% of full-time employees are satisfied with their current finances—a sharp increase from 26% in 2009, 58% remain worried about their financial future. Employees’ confidence in their ability to retire has climbed with 23% very confident of their income sufficiency for the first 15 years of retirement. On the other hand, that confidence deteriorates when workers look farther ahead, with only 8% very confident of having adequate income 25 years into retirement.

With respect to delayed retirement, Tower Watson reports:
With many workers expecting to fall short on their retirement savings, nearly four in 10 plan on working longer. That’s an increase of nine percentage points since 2009. A large majority of these employees expect to delay retirement by three or more years, and 44% plan on a delay of five years or more. The profile of those delaying retirement tends toward the disengaged, less healthy and more stressed. These findings suggest a higher average retirement age in the future. In 2009, 31% of workers planned on retiring before 65, and 41% planned on retiring after 65. According to the 2013 survey, only 25% plan on retiring before 65, and half expect to retire after 65. One in three employees either does not expect to retire until after 70 or doesn’t plan to retire at all.
Tower Watson also notes that access to a defined benefit plan is a significant factor in employee attitudes: Workers without such access (and those in ill health) are consistently the most worried about their finances and retirement; workers with access to such plans are moderately more secure and more engaged in reviewing their savings, although even they continue to worry about possible changes to their plans and cuts to public programs.

Source: Tower Watson News Release (March 26, 2014)

Thursday, March 27, 2014

Northern Ireland: Commissioner for Older People Urges Government and Employers To Increase Older Workers Participation in the Workforce

The Commissioner for Older People for Northern Ireland has released a report that shows that the economy in Northern Ireland could be increased by £2.3billion by 2037 if the number of older people in the workforce increases. According to "Valuing an Ageing Workforce," which was produced in conjunction with the International Longevity Centre-UK, the government and employers should introduce ways to enable older people to remain in the workforce for as long as they wish to. The Commissioner, Claire Keatinge, says:
"This shows that older workers can be more effective than their younger colleagues and make a positive contribution in the workplace, despite widely held misconceptions that somehow productivity and output diminish with age.

"Many people will want to stay in work, for a variety of reasons, such as the removal of the previous Default Retirement Age, increase in life expectancy, and for personal fulfillment; and some will stay in work because they need to for financial reasons.

"It is essential that appropriate supports are put in place so as to enable older workers to continue to be able to play a positive role in the workforce."
Among the findings reported by the Commissioner and highlighted in a briefing note to the report are:
  1. Employers would benefit from valuing the positive role that older people play in the workplace.
  2. Employment rates for older people in Northern Ireland have increased since the financial crisis in 2008 and there is a strong economic case for working beyond 65.
  3. There are still a range of barriers which prevent people working longer, including ageist attitudes, health, caring responsibilities, skills and training opportunities, as well as the fact that ‘cliff-edge’ retirement is still a common occurrence here.
  4. Initiatives should be introduced by the Northern Ireland
    Executive and employers to support people to work longer, should they wish to do so.
  5. Older people in Northern Ireland should have the right to remain in work as well as the right to retire, and they should be supported in either scenario.
Source: Commissioner for Older People for Northern Ireland News Release (March 25, 2014)

AgeUK Literature Review Finds Someone’s Age Bears No Relation to Worker's Ability To Do Most Jobs

A literature review conducted by AgeUK reports that someone's age bears no relation to their ability or capability to perform the vast majority of jobs. Thus, AgeUK recommends that employers reconsider their existing workforce and HR strategies, and develop more effective retirement policies that place the wellbeing of their older employees at the heart of the process.

In its review, AgeUK finds, among other things that:
  • The evidence shows either a lack of relationship between productivity and age, or that older workers are at least as productive as their younger colleagues. Even in physically
    demanding situations, for example on a factory production line, age is no barrier to working productively.
  • Measuring individual productivity is challenging for researchers. Older studies, which often suggest older workers are less productive, frequently rely on outdated assumptions about aging and health, or fail to account for a myriad of other factors. More recent studies, which often find older workers are at least as productive as younger workers, are better able to account for these.
  • As people age some cognitive and physical abilities do change—however, this does not
    make older workers better or worse than younger colleagues. There is no evidence of a substantive decline in ability in most people until well past the end of a typical working life. Aging affects everyone differently, and it is not possible to make predictions about any one individual’s capability.
  • The interaction between skills, knowledge and experience means that many tasks can in fact be performed better as people age, and raises challenges for employers about how best to utilize individuals’ skills and abilities.
  • Recognizing the challenges faced by older workers and offering solutions to mitigate them, for example flexible working to help people meet caring responsibilities, can help enhance individual productivity.
Source: AgeUK "Productivity and Age" (March 2014)

Wednesday, March 26, 2014

Australia: Superannuation Conference Hears about Research Findings on Involuntary Retirement and Gen Y Attitudes about Suuperannuation

The 2014 Conference of Major Superannuation Funds sponsored by the Australian Institute of Superannuation Trustees (AIST) heard from a number of presenters about the confluence of retirement and an aging workforce. Among other things, conferees heard that:
  • A more flexible approach to retirement may be needed to account for the significant minority of older Australians who are forced to leave the workforce early. According to a research report commissioned by AIST and prepared by the Australian Centre for Financial Studies (ACFS), up to 40% of older Australians could be classified as involuntary retirees. AIST CEO Tom "Garcia said more needed to be done to help older workers stay in the workforce longer so that they had a better chance of building their retirement savings before they reached old age. Equally, there needed to be recognition that those who retired early due to ill-health were often hit with additional health-related expenses that put pressure on their savings. See AIST media release, as well as presentation by Professor Deborah Ralston, Executive Director, ACFS, Professor of Finance, Monash University on "Involuntary Retirement: Characteristics and
    Implications"
  • Research commissioned by AIST suggests that many Gen Y’s have a realistic idea of how much money they need to retire, what the Age Pension will supplement and how they want to use their money at retirement time. However, they lack the knowledge and education to understand more. See AIST media release and presentation by Michelle Tustin, Research Director, Colmar Brunton, on "Gen Y: The Messaging Wars"
Source: Australian Institute of Superannuation Trustees CMSF2014 Presentations (March 2014)