Friday, June 27, 2008

Survey: MetLife Reports that Pre-Retirees Overestimate Retirement Moneys and Underestimate Retirement Length and Needs

According to research conducted by MetLife, 69% of pre-retirees overestimate how much they can draw down from their savings, with 43% saying they believe they can withdraw 10% or more each year while still preserving their principal, even though most retirement experts suggest a withdrawal rate of no more than 4% annually. In addition, 60% underestimate life expectancy and 49% underestimate the amount of pre-retirement
income they’ll need once they retire.

These results are reported in MetLife's 2008 Retirement Income IQ Test, released five years after its MetLife’s first Retirement Income IQ Test. Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute said that “While we would have liked to have seen more dramatic increases in the scores, directionally
Americans are improving their retirement income IQs."
"Yet, there are still far too many misconceptions about retirement income issues," added Timmermann. "Most concerning is the fact that so many pre-retirees overestimate how much they can spend down from their retirement savings annually. This statistic should serve as a wake-up call for pre-retirees and advisors alike."
Source: Press Release (June 25, 2008)

Businesses Deal with New Safety Challenges as Workforce Ages

According to loss control experts from Chubb Group, as the number of employees over the age of 55 continues to rise, businesses are faced with the challenge of retaining these valuable workers while reducing health- and injury-related losses. Conducting a session on "The Aging Workforce-It's Not Just Ergonomics" at the American Society of Safety Engineers' (ASSE) Professional Development Conference and Exposition ("Safety 2008"), Tina Minter and Russell Dronne noted that while Bureau of Labor Statistics studies show that injury rates among older workers are lower than those of their younger counterparts, other factors can contribute to increased health and safety exposures: age-related chronic disorders and diseases; loss of hearing; impaired vision; and physical and cognitive limitations.

Miner said that businesses can help mitigate their losses by improving policies and workplace design to allow employees to continue to work in a safe and healthy environment. Among other things, she provided examples of what businesses can do to address each of these risk factors, including:
  • allow for flexible work hours so that those with poor night vision can adjust their start and finish time to coincide with daylight hours;
  • encourage employees to use the health care system for preventative well visits;
  • eliminate heavy lifts, elevated work from ladders and long reaches;
  • encourage employees working at a computer to take small breaks every 30 minutes;
  • don't rely on sound as the sole means of emergency communications, as employees with hearing loss may not hear announcements.
Source: Chubb Group Press Release (June 19, 2008)

Tuesday, June 24, 2008

Maryland: Census Bureau Issues Profile of the Older Worker

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on Maryland, the 11th state to be released in the series.Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in Maryland: 2004":
  • 14.6% of workers were 55 and older, while 3.4% were 65 and older;
  • the mining industry was the only industry to have more than 20% of its workers 55 and over (20.6%); in metropolitan areas, the educational services industry had the the largest percentage of workers 55 and older (25.5%); and
  • the state's health care and social services industry employed the greatest number of older workers, with about 15.2% of the workers 55 and older being in that sector.
Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics What's New (June 19, 2008)

Thursday, June 19, 2008

Survey; Unlocking Clues to "Encore" Careers among Boomers

A survey of people aged 44 and 70 estimates that between 5.3 and 8.4 million Americans have already launched "encore careers"--positions that combine income and personal meaning with social impact--and that half of those not already in encore careers, half are interested in them. The "2008 MetLife Foundation/Civic Ventures Encore Career Survey," conducted by Peter D. Hart Research Associates, Inc., finds that a majority of Americans in this age bracket express a desire to use their skills and experience to help others and, of those currently in encore careers, 84% report a high level of satisfaction and 94% say they see the positive results of their work and know they are making a difference.
"This is the first national survey to uncover evidence that the encore career is more than an appealing idea," said Marc Freedman, founder and CEO of Civic Ventures, a think tank on boomers, work and aging. "Unexpectedly large numbers of boomers are looking for purpose-driven jobs that provide them with both means and meaning. That’s great for them and great for the rest of us, too. As this research shows, they are applying their skills and passions to the very public interest fields that need them most."
The jobs of special interest to those looking to encore careers are in education, health care and the nonprofit sector. Among other findings in the report, most respondents interested in encore careers are worried that these positions may be hard to find and may not meet their needs--80% expressed concern about having the flexibility to take time off and a majority were worried about having adequate income and benefits. However, respondents currently in encore careers reported few problems with these same issues.
Most of those in encore careers come from professional and white-collar jobs (88%), have at least a college education (67%), and tend to live in cities and their surrounding suburbs (72%). Most (60%) are leading edge boomers between the ages of 51 and 62. Most (56%) are women. But the research also reveals diversity in the ranks. Of those in encore careers, three in 10 never graduated from college, three in 10 live in small towns and rural areas, and nearly two in 10 (18%) worked in a blue-collar job before making the switch to an encore career.
In addition to publishing the report, Civic Ventures has provided a number of supporting articles and commentaries.

Source: Civic Ventures News Release (June 18, 2008)

Hungary: Looking to Raise Average Retirement Age without Changing Pension Age

According to news reports, Hungary's government has rejected opposition calls to raise the pension age. Lajos Korózs, State Secretary of the Welfare and Labor Ministry, who also holds office as the National Council for Senior Citizens, said at a news conference that the government is aiming to raise the average age at which Hungarians retire or take earlier retirement.

While Hungary’s pension age is currently 62, Korózs said that, because of the number of people who take early retirement, the average age when Hungarians stop working is 58.6. It would like to focus on "cranking up this figure and bringing it closer to 62." In the view of the government, the proposal of opposition leader Fidesz to increase state pensions by no more than the inflation rate each year is unacceptable, Korózs emphasized.

Sources: BBJ "Hungary: No plans to raise pension age" (June 18, 2008); Portfolio "Retirement age hike unlikely in Hungary, State Secretary says" (June 18, 2008)

Tuesday, June 17, 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)

Friday, June 13, 2008

Bulgaria: Age Discrimination Resulting in Large Number of Older Unemployed

According to news reports, Veselin Ilkov, head of a Department in Bulgaria's Ministry of Labor and Social Policy, believes that 46% of the unemployed in Bulgaria between 50 and 60 years have no work exactly because of their age. Ilkov proposes that an employer ethic codex be accepted not to allow age discrimination.

Although since 1 October 2006 there is law against the age discrimination, there still are many employers in Bulgaria who use the advance in years as excuse for dismissing or eliminating by competition for vacation work place a person, without taking under consideration the worker's qualification and skills.

Sources: "Half of the Unemployed Over 50 Years--Discriminated" (June 13, 2008); FOCUS "Veselin Ilkov: Employers often eliminate older people, applying for a position" (June 13, 2008)

Wednesday, June 11, 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)

Italy: Pension Proposals of Berlusconi Government

Proposals by the Italy's former Prodi-led government to phase in an increase in retirement ages and number of pensionable years held from 57 to 60 in 2010 will not be scrapped, although Maurizio Sacconi, Italian welfare minister, described it "an onerous mistake" of the previous government. According to news reports, "Sacconi wants to start using the new 'coefficients' or ratios through which pensions will be calculated as a function of contributions, from as early as this autumn, rather than the 2010 date set by Prodi's government."

In addition, Sacconi wants to narrow significantly the definition of "fatiguing" jobs or manual labor employment which officials believe allow people to retire at an earlier age. He also is encouraging greater attention to private pensions and has proposed setting up a European commission on pensions, with the specific objective of identifying a general strategy, capable of promoting development and re-direct towards patterns of growth.

Sources: "New Italian government alters pension plans" (June 11, 2008); AGI News "Pensions--Sacconi: Right To Set Up A European Comparison" (June 7, 2008)

Tuesday, June 10, 2008

Progress of eSangathan in Including Aging Workforce in the Information Society

In advance of an official report on the results of the eSangathan Conference "Impact of Information & Communication Technology on Ageing Workforce" held in Mumbai in April 2008, a couple articles are providing some insight into progress being made in extending the working-life and knowledge services of aging workers by using information and communication technology (ICT). The eSangathan project funded by the European Union is, among other things, experimenting with two pilot projects in India over the benefits that aged workers could draw from collaborative tools for remaining longer in the work force, with good working conditions.

In an interview covering e-inclusion efforts, Dr Andrew Sors, Head, Science & Technological Development, Delegation of the European Commission in India and a participant at the conference said:
A good example of the impact of ICTs on the ageing workforce was discussed at the e-Sangathan conference. Indeed, through the use of technology, retired knowledge workers are able to keep working on projects if they wish to do so.

They can work from home, don’t need to travel but are able to remain active for longer and this has an extremely positive impact on their lives.
Mr. Ashank Desai, Chairman, Mastek Limited & President of the National Association of Software and Service Companies (NASSCOM) , informed the delegates of the importance of collaboration as eSangathan for about 60 million senior citizens in India:
"The country is experiencing a growth rate of 8-9 percent, faces a shortage of talent, and the workforce spectrum could be widened by the inclusion of the aged population to leverage the talent system".
Sources: i4d (Information for Development) "Including the aged in mainstream workforce" (May 2008); The Hindu Business Line "Bringing Silver surfers into the Web" (June 9, 2008)

Tuesday, June 03, 2008

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)