Saturday, May 31, 2014

Israel: Government Drafting Proposal to Encourage Delayed Retirements

According to an article in Haaretz, the Israeli government is drafting a plan to encourage people to work past retirement age. As reported by Meirav Arlosoroff, the plan drafted by the Pensioner Affairs Ministry—led by minister Uri Orbach and ministry director general Gilad Semama—together with the National Economic Council in the Prime Minister’s Office would cost NIS 240 million ($69 million) a year, and would be funded by dropping the current pension increases offered to people who keep working beyond retirement age.
The number of retirement-age Israelis is set to reach nearly 15% by 2030, from 10% today, meaning the national expenditure on the elderly is likely to grow from the current 10.2% of GDP to nearly 12%, an increase of 16 billion shekels.

Surveys have shown that most people approaching pension age would like to continue working, but face barriers including discrimination, outdated skills and above all a taxation and state pension policy that serves as a strong disincentive.
In Israel, the retirement age is 62 for women and 67 for men. Currently, taxation and pension policies that essentially work out to a 97% income tax on some retirees who continue to work past retirement age, although those taxes are greatly reduced if someone works past 70. The proposal would cut the taxes and penalties for working to 44%-67% of the person’s salary.

In a follow-up article, Arlosoroff reports on a survey conducted by the business data firm BDI Coface for TheMarker, which revealed that only one in five workers hired by the 100 largest companies was over 45—revealing a picture of blatant discrimination based on pure prejudice:
Older job seekers are less likely than their younger peers to be hired, despite being perceived as more stable, experienced and capable of working longer hours because they don’t have small children at home.
These results echo findings of a survey conducted for the Equal Employment Opportunity Commission by the Economy Ministry’s research division, which found that the hiring rate for employees aged 45 and up is just 1.3%, even though this group accounts for 38% of Israel’s labor force.

Source: Haaretz "Plan would reduce tax, pension penalties for working past retirement" (May 27, 2014); Haaretz "No country for old workers" (May 30, 2014)

Thursday, May 29, 2014

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)

Monday, May 12, 2014

Alaska: Department of Labor Outlines Status of Aging Workforce and Consequences of Increased Retirements

An article in the May 2014 issue of Alaska Economic Trends looks at the current composition of the state's workforce and jobs with high numbers of older workers in order to help identify occupations most likely to be affected by an increase in retirements. According to the report by Rob Krieger, from 2002 to 2012, there has been an increase in both the number and percentage of older workers in the state. In addition, this age group earns a much larger percentage of total wages than they did a decade ago. These trends are more significant in the public sector.

In looking at the jobs with the most older workers, the top occupations within state and local government include a number of technical and specialized positions, management and teaching jobs.
In the private sector, these occupations include a combination of highly skilled, highly technical, and top-level management positions. Physicians and surgeons, architectural and engineering managers, and chief executives topped this list…. What these occupations have in common is their requirement for extensive education and experience.
The article also points out that one major factor in determining the effects of vacancies will be the rate at which these workers retire, since not all who are eligible will retire at once, and some will remain working.

Source: Alaska Department of Labor "A Growing Number of Older Workers: Where upcoming retirements could come from" Alaska Economic Trends (May 2014)