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)

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)

Norway: State Employee Unions Seeking More Time Off for Senior Workers

According to press reports, labor unions representing state workers are demanding 12 extra days off every year, plus even more for senior workers over age 62, in order to make it easier for the employees to take care of aging parents, for example, and to discourage older workers from retiring. In particular, "[o]ne of the unions, Akademikerne, also wants workers over age 62 to receive 28 additional days off, in addition to the 30 days of paid holiday they get every year. That means senior employees would effectively get three months off every year."

As reported by Newspaper VG, Rikke Ringsrød, the union's chief negotiator in the state, since the government is trying to get more people to remain longer in work and senior political holidays (currently, all state employees over 62 years receive eight holidays a year, plus up to 6 days as may be agreed with the local employer) have proven to be useful, the union proposal is to provide flexible arrangements that each individual can choose between reduced fractional positions or other arrangements to choose to be in the job. He further suggests that these are employees who are of great benefit to employers, and that it is better that they are nine months on the job than they disappear from the workplace.

VG says that Government Ministers Rigmor Aasrud, responsible in government for wage, would not comment on the union proposals.

Source: Views and News from Norway "State workers want more time off" (May 2, 2012)

Singapore: Government Employees Will Be Able Secure Post-Retirement Beginning in July 2011

Singapore's Public Service Division has issued guidelines that will allow employees in the Singapore Public Service can look forward to early implementation of re-employment guidelines in July 2011, ahead of the national legislation. Specifically, re-employment will give officers the opportunity to work up to age 65 and, later, up to age 67, if, among other things:

• an officer has, in the three years prior to retirement, put in satisfactory work performance as well as have no disciplinary action taken against them;
• an officer is medically fit to continue working;
• public service organisations may re-employ officers in jobs similar to that before retirement, or on other arrangements such as part-time, job-sharing, or project work; and
• eligible officers must be informed at least six months before retirement to discuss re-employment, with an offer to be made at least three months before retirement.

Source: Prime Minister's Office Public Services Division Press Release (November 30, 2010)

Recession Impairing Ability of State and Local Governments To Adjust Retireee Health Liabilities

The Center for State and Local Government Excellence has released an issue brief finding that the U.S. economy has slowed the ability of local governments to address long-term funding of their retiree health care obligations. "How Local Governments are Addressing Retiree Health Care Funding" looks at 206 jurisdictions that were had reported in 2009 that they were likely to adopt a long-term strategy to strengthen their retiree health care funding.

According to the new brief, while the economy, insufficient revenues, and competing budget priorities have posed significant impediment to their plans, many jurisdictions are making sweeping changes in their retiree health care plans. Specifically, the brief reports that:

• 36% of the jurisdictions have increased or plan to increase the years of service required to vest.
• 11% have increased the retirement age.
• 39% have eliminated or plan to eliminate retiree health benefits for new hires.

Source: Center for State and Local Government Excellence News Release (August 5, 2010)

State Governments Changing Retirement Rules, Requiring Later Retirement

State governments are increasingly requiring many new government employees to work longer before retiring with a full pension, or are increasing penalties for early retirement, according to an article in the Wall Street Journal. As written by Jeannette Neumann, Michel Corkery, and Marcus Walker, states are responding to widening gaps between the obligations made to workers and the money expected to be available to pay them. "Though lengthening lifespans have been expected to pressure pension systems, the looming fiscal predicament has emboldened lawmakers to demand more years from employees."

Among the changes highlighted in the article:

• Illinois--lawmakers voted in March to increase the retirement age for most new hires to 67 from 60.
• Utah--new fire and public safety employees as of July 1, 2011, must work 25 years, up from 20, before getting a full pension. Most other state employees must now work 35 years instead of 30 before receiving their pension.
• Arizona--increased the "retirement rule"—worker's age plus years of service before retirement—to 85 from 80.

Source: Wall Street Journal Stressed States Are Forcing Workers to Retire Later (February 2, 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)

United States: GAO Report Recommends Increased Communication among Agencies to Enhance Retention and Hiring of Older Workers

The U.S. Government Accountability Office (GAO) has issued a report recommending that Office of Personnel Management (OPM) broadly disseminate agency-developed promising practices to hire and retain older workers. In putting together "Older Workers: Enhanced Communication among Federal Agencies Could Improve Strategies for Hiring and Retaining Experienced Workers", GAO interviewed officials at three agencies with high proportions of workers eligible to retire and identified agencies’ promising practices to hire and retain older workers.

GAO notes that the proportion of federal employees eligible to retire is growing. In fact, at four agencies—-the Agency for International Development (USAID), the Department of Housing and Urban Development (HUD), the Small Business Administration, and the Department of Transportation-—46% of the workforce will be eligible to retire by 2012. However, GAO also notes that the federal government has historically enjoyed relatively high retention rates, with 40% or more of federal employees remaining in the workforce for at least five years after becoming eligible. In addition, in fiscal year 2007, federal agencies hired almost 14,000 new workers who were 55 years of age or older and brought back about 5,400 federal retirees to address workforce needs.

The three agencies GAO examined rely on older workers in different ways: USAID brings back its knowledgeable and skilled retirees as contractors to fill short-term job assignments and to help train and develop the agency’s growing number of newly hired staff. SSA uses complex statistical models to project potential retirements in mission critical occupations and uses these data to develop recruitment efforts targeted at a broad pool of candidates, including older workers. HUD relies primarily on older workers to pass down knowledge and skills to junior staff. In addition, GAO noted that other agencies have developed practices that are useful in tapping older workers to meet short-term needs, such as the Department of State, which has developed databases to match interested retirees with short-term assignments requiring particular skills.

GAO concludes that while at least three agencies have developed their own practices that show promise in recruiting and retaining talented older workers who have needed and specialized skills, little attention has been paid to sharing it with other agencies. Accordingly, it calls on OPM to "develop a systematic approach, which may include communicating through the CHCO Council, to share information broadly across the federal government about agency-developed promising practices in recruitment and retention of older, experienced workers to meet their workforce needs."

Source: U.S. Government Accountability Office Report Summary of GAO-09-206 (February 24, 2009)

Senate Aging Committee Holds Hearing on Using Federal Government as Model for Hiring, Retaining Older Workers

The U.S. Senate Special Commitee on Aging Chairman Herb Kohl (D-WI) chaired a hearing titled "Leading By Example: Making Government a Model for Hiring and Retaining Older Workers." Kohl believes that "we must encourage employers to adopt policies now to attract and retain older workers" and that it "is possible to craft commonsense policy to create a win-win situation for both older workers and the companies that employ them." As for his focus on the federal government, he introduced the hearings by stating:

Why the federal government? Because nowhere is the foreseen labor shortage more pronounced than within the workforce of the nation’s largest employer. Over the next five years, more than half a million permanent full-time federal employees—or about one-third of the full-time federal workforce—will be eligible to retire. And over the next ten years, more than sixty percent of the federal workforce will reach retirement age.

Others heard at the hearings (with links to their prepared testimony) included:

• Senator Gordon H. Smith (R-OR), Ranking Member of the Committee;
• Barbara Bovbjerg, Director, Education, Workforce and Income Security Issues, US Government Accountability Office;
• Nancy Kichak, Associate Director, Strategic Human Resources Policy, Office of Personnel Management;
• Thomas Dowd, Administrator, Office of Policy Development and Research, Employment and Training Administration, US Department of Labor;
• Max Stier, President and CEO, Partnership for Public Service;
• Chai Feldblum, Co-Director, Workplace Flexibility 2010

A webcast of the hearing is available by clicking here.

Source: U.S. Senate Committee on Aging Press Release (April 30, 2008)

Boston College Center on Aging & Work Launches States Initiative, Multigenerational Focus

According to an article in the Boston College Chronicle, the Boston College Center on Aging & Work is launching a State Perspectives Institute that will collaborate with states on promoting the aging public sector workforce as a potential economic asset. Among other things, the Institute will "gather information and work with state leaders to raise awareness of the benefits of a multigenerational workforce in the 21st century."

One of the goals of the Initiative is to release of a series of profiles on the multigenerational workforce for all 50 states produced in partnership with Experience Wave. These profiles are supposed to provide statistical synopses in areas such as age distribution, labor force participation, industry sector employment, and workforce education and preparedness.

Another project of the Initiative will be States as Employers-of-Choice, a collaboration between the Center and the Twiga Foundation, Inc. of Boise, Idaho, sponsored by the Alfred P. Sloan Foundation. The project’s goal is "to increase awareness of the aging public sector workforce as well as provide assessment of the readiness of states" to be employers of choice and to develop practice tools.

Source: Boston College Chronicle (February 28, 2008)