New Zealand: Flexible Working Options Attract Older Workers

According to the Work and Age Report 2006, a recent survey conducted by the New Zealand EEO Trust, employers would be better placed to retain the skills of older workers if they offered quality part-time work and flexible working hours. With more than 6,400 people responding (most over 45 years old, but 24% younger than 45) to questions about what workplace conditions would encourage them to continue working past their expected retirement date, quality part-time work and flexible working hours were the most popular options.

Reliability is the number one quality older people bring to the workplaces according to survey respondents. In addition, most agreed that older people provide good customer service and communication skills, are committed to their careers, have skills in training people, show initiative and are able to create a good atmosphere in the workplace. However, about one in three respondents said they had experienced difficulties at work due to people being different ages, and a third said they had experienced discrimination at work due to their age.

Source: Equal Employment Opportunities Trust Media Release (May 26, 2006)

Commentary: Waste of Mandatory Retirement

Michael Willard, writing int The Ukranian Observer, chastises corporations as being rather myopic when it comes to judging value of an employee: "They often look at how expensive the person is, and feel sure a younger firebrand is up to the task of the job." Even in a country, such as Ukraine, where retiring at 60 is not unusual but mortality charts, particularly for males, extend just a few clicks beyond that age, Willard findds "many older Ukrainians not wishing to retire at 60 or 65."

Willard then went on to quote extensively from a speech given by Lord John Browne, CEO of British Petroleum, railing against mandatory retirement. Browne argues that (1) countries need people to work longer and need to ensure that the balance between those in work and those not working doesn't move to the point where the burden of taxation and transfer payments is intolerable, and uncompetitive, (2) mandatory retirement at a fixed age is inappropriate since more than 70% of the European economy is now based on services, rather than manufacturing, and (3) in key disciplines such as engineering, a disproportionate share of BP's workforce is over 45, and indeed over 50. More importantly, however, Browne argues that it "is the need for a civilized society to overcome prejudice" and that "too many people seem to think that it is still acceptable to say you've reached the age of 60: We don't want you any more."

Source: The Ukranian Observer "THE WORKPLACE: The Waste of It All" (May 2006)

United Kingdom: Government White Paper on Pension Reform, Raising Retirement Age

The U.K. government has published its response to the report of the Pensions Commission in the form of a White Paper--"Security in retirement: towards a new pensions system", which sets out proposed legislation. Among other things, if passed into law, the state pension age would gradually rise to 68 by 2044. Other highlights include:

• During the next parliament, the state pension will be made more generous, and future increases will be tied to earnings rather than prices
• The number of years it takes for people to qualify for a full basic state pension will be cut to just 30
• From 2012, people will be automatically enrolled into a new, low-cost national savings scheme, albeit with the chance to opt out if it is not suitable for them.

The proposed changes will not affect anyone currently over the age of 47.

In addition to the complete White Paper, online resources include an Executive Summary and Secretary of State for Work and Pensions, John Hutton’s Oral Statement to the House of Commons.

Source: Department for Work and Pensions Press Release (May 25, 2006)

Anti-Aging Developments: The Social Burden of Longer Lives

In the first of a three-part series on the science of anti-aging, Ker Than reports for Fox News that "while scientists go back and forth on the feasibility of slowing, halting or even reversing the aging process, ethicists and policymakers have quietly been engaged in a separate debate about whether it is wise to actually do so."

When it comes to the workplace, living longer will mean more time spent working: "Careers will necessarily become longer, and the retirement age will have to be pushed back, not only so individuals can support themselves, but to avoid overtaxing a nation's social security system." In addition, the experts worry that competition for jobs would become fierce and workplace mobility (or lack thereof) could make it harder for younger workers to get ahead.

Source: FOXNews.com "Toward Immortality: The Social Burden of Longer Lives" (May 23, 2006)

House Committee Approves Reauthorization of Older Americans Act

Without opposition, the U.S. House Committee on Education & the Workforce has approved the Senior Independence Act (H.R. 5293), which reauthorizes and strengthens services offered under the Older Americans Act, the chief federal law governing the organization and delivery of a number of social services for older Americans. According to a summary of the bill, the legislation would, among other things safeguard employment-based training for older Americans by:

• Maintaining the program’s dual purpose of community service and employment-based job training;
  
• Allowing public or private nonprofit agencies and organizations to compete for national grants, which is consistent with current law;
  
• Retaining the age of 55 for program eligibility (consistent with current law), but requiring grantees to first serve those with the greatest need, including individuals over the age of 65.
  
• Strengthening opportunities for business sector partnerships
• Requiring grantees to have an average time limit for participation not to exceed 2 years and limiting individual participation to not more than 4 years

Source: U.S. House Committee on Education & the Workforce Press Release (May 17, 2006)

Reactions:
While commending the House for its bipartisan agreement to reauthorize the Act, the AARP is concerned that "the participant tenure limits in this bill for the Senior Community Service Employment Program (SCSEP) will disproportionately impact those oldest and hardest to serve. These vulnerable, low-income older workers, representing some 30 percent to 50 percent of the program's current participants (18,000 to 25,000 individuals) will be the first affected by these tenure limits." Press Release, May 18, 2006

Upcoming Aging Workforce Conferences Announced

Two organizations focusing on the aging workforce have announced conferences devoted to these issues.

First, Boston College Center on Aging & Work has announced its inaugural conference on "Aging of the Workforce: Competitive Advantages or Vulnerabilities" for May 31-June 2, 2006 , in Newport, RI.

A timely opportunity for human resource professionals and other corporate executives to explore ways to link worker talent to strategic business goals. The meeting will put aging issues in broader business contexts and provide a chance to apply lessons-learned to your company. Leaders from business, universities, and the media will share their views with participants. Time allotted forquestion-and-answer and active participation will enable you to hear from peers, test your ideas and evaluate your own experiences with engaging the talent of older workers. The meeting is free but open by invitation only; reservations
are required in advance.

Second, the University of Pittsburgh's Institute of Politics is presenting "The Aging Workforce: Challenge or Opportunity?" June 23, 2006 in Pittsburgh, PA.

This event will bring national and regional leaders together to consider the implications of southwest Pennsylvania's aging workforce. Regional research indicates that the mining, manufacturing, transportation and utility industries are disproportionately mature and that few companies in these sectors have fully considered the implications of their workforce demographics. For additional information please contact Vanessa Lund at the Institute of Politics.

Source: Aging Workforce News Conferences and Events Regularly Updated

Connecticut: Repeal of Social Security Offset from Workers Comp Advances

As of May 17, the legislation (Public Act 06-84) in Connecticut to repeal the social security offset from workers' compensation benefits had passed both houses and had been trasmitted to the Secretary of State. See eaelier Aging Workforce News article. Opponents of the legislation have stated that "the cost of this proposal (SB-25) to Connecticut employers is expected to be $8 million in the first year alone, according to a recent impact statement issued by the National Council on Compensation Insurance (NCCI). That increased cost would continue in future years."

Source: Senate Bill 25 Legislative History

Retirement Study: Americans and Their Employers Don’t See Eye to Eye

In releasing the 2006 Merrill Lynch New Retirement Study, Merrill Lynch reports a "startling disconnect" between how Americans and their employers view retirement: While many people are actually working in retirement or have taken steps for a new retirement career, most employers are not on track to prepare for this phenomenon.

“Not only is the new model of retirement here, but it transcends many different age groups,” said Michael Falcon, head of the Retirement Group at Merrill Lynch. “Multiple generations report cycling in and out of work and pursuing a new career in later life as the retirement ideal. This important study shows us that companies need to be aware of this new concept of retirement in order to prepare for the new work force realities.”

According to the survey--conducted for Merrill Lynch by Harris Interactive, 71% of those surveyed want to work in some capacity in retirement. The most cited reason for working during retirement was to stay mentally and physically active, and most would like to change their line of work and cycle between periods of work and leisure. On the other hand, while companies are not completely in the dark and recognize the shift toward the desire to work in retirement, they are more likely to assume that employees want to work a regular part-time schedule than to cycle between periods of work and leisure and have not responded to individuals’ overwhelming desire to pursue a completely new line of work in their “new retirement.”

Source: Merrll Lynch News Release (May 18, 2006)

Europe: Are EU Measures Aimed at Increasing Employment Older Workers Delivering?

Anne-Sophie Parent, director of AGE, writes that while--following the adoption of the EU framework directive 2000/78, at which policy makers became aware of the complex issue of age discrimination--ambitious targets were set in the framework of the Lisbon strategy and all member states decided to do something to keep workers in the workforce for longer, this approach has usually not delivered the expected results. For example, draft legislation in Germany, which would have allowed employers to hire workers aged over 52 under limited contracts without any restriction, was deemed to constitute age discrimination and forbidden by the European courts.

In other countries, active labour market policies targeting the over 50s succeeded in increasing the employment rate of older workers: Finland, for example, whose active ageing policy is delivering very significant outcomes.

So, what lessons can we draw from the limited experience gathered so far on measures to promote the employability of older workers?

We feel that labour legislation should aim at compensating the age factor in such a way that it becomes neutral for both employers and workers.

This means creating incentives for both employers and workers without being detrimental.

Parent beleives that "an age-friendly culture needs to be promoted both inside and outside the labour market. Awareness needs to be raised on the value of a diverse workforce which reflects the diversity of today’s EU population."

Source: "EU Employment Week: Reflecting Europe’s diversity" EUPolitix.com (May 17, 2006)

Worries that Aging Workers Will Bring Brain Drain to Indiana

According to a report, whose findings will be shared at the “Managing the 21st Century Workplace: Value and Impact of Older Workers” conference, nearly 29% of Indiana residents will be age 55 or older by 2030, versus 22.4% in 2005. Thus, Chris O'Malley reports, "employers and economic development leaders, already lamenting that 36 percent of Indiana college graduates leave the state after graduation, may now have another 'brain drain' to worry about."

While some economists say fears of a labor shortage are unfounded because of expected productivity gains and other offsetting factors, Barry Spiker, a senior fellow at the University of Indianapolis’ Center for Aging & Community, warned: “We’re facing a crisis that’s just never been seen before in this country, ever.”

The conference will share new statewide data, including the findings of “Gray Matters: Opportunities and Challenges for Indiana’s Aging Workforce,” a report written by former Indiana Economic Development Council President Graham Toft and Nadine Jeserich, now both working at local economic development firm Thomas P. Miller & Associates. According to the report, as older workers leave the work force, Indiana won’t see as much of a brain drain as many other states, however, since only 11% of the state's population 55 or older holds a bachelor’s degree or higher, placing it 46th among all states. In addition, only 16% of that population are in high-skill occupations—placing Indiana 42nd. Finally, Indiana ranks dead last in coaxing older workers back to college.

Source: "Employers brace for age shift" Indianapolis Business Journal (May 15-21, 2006)

Hewitt Study Finds Company Efforts Positively Impact U.S. Employees’ 401(k) Saving Habits

Hewitt Associates has released its report “How Well Are Employees Saving and Investing in 401(k) Plans, 2006 Hewitt Universe Benchmarks,” which finds that efforts by companies to help U.S. employees save for retirement--including putting the 401(k) plan on autopilot, simplifying plan choices and targeting communication--have resulted in improvements in employees’ retirement saving and investing behaviors. Nevertheless, the report also discloses that nearly half of employees examined still failed to participate in their 401(k) plan or failed to contribute enough to obtain the full company match.

Source: Press Release Hewitt Associates (May 16, 2006)

McKinsey Survey Finds U.S. Workers Retiring Early

Despite growing financial pressure to stay in the workforce, a report by McKinsey & Co., based on a national survey of 3,086 people, shows that American workers are far more likely to be forced into an early retirement than many expect. Writing for the LA Times, Jonathan Peterson reports that 40% of retired workers left their jobs sooner than they had planned, usually because of health problems or the loss of employment, and that while 45% of people currently employed planned to keep working past age 65, only 13% of polled retirees had done so.

McKinsey's data do not mean that the trend toward a later retirement age is changing, experts say. But the facts counsel caution to those who discount the challenges of working into their late 60s or beyond, and they suggest that many who assume they will work late in life may be mistaken.

Source: "Many Forced to Retire Early" Los Angeles Times (May 15, 2006)

Hong Kong: Low Retirement Age Threatening Brain Drain

Doug Crets writes that attendees at an HSBC retirement forum were told by a researcher on aging and a legislator that "Hong Kong's low mandatory retirement age--coupled with its rapidly aging population and one of the world's lowest birth rates--will lead to a 'brain drain' unless the government and individuals plan for the future." However, he also notes that a recent survey on aging shows that most Hong Kong people believe the government should enforce mandatory "additional private savings" and increase the retirement age.

Source: "Aging expert warns of brain drain" The Standard (May 16, 2006)

The End of Retirement

The U.S. Department of Labor's Monthly Review has published an article by Teresa Ghilarducci, a teacher of economics at Notre Dame University and a visiting professor at the New School for Social Research, about the signs of the end of retirement all around. She argues that "the changes in the retirement future of Americans stem from the decline of union contracts, a dramatic shift in presidential and congressional attitudes about government responsibility for social insurance, and the substitution of defined contribution or 401(k)-type accounts for traditional defined benefit pensions."

Twenty years of experience with 401(k) plans reveal that workers will never be able to accumulate enough assets in individual accounts and choose payout options that will provide a steady stream of income for life after retirement. This means that Americans will turn to the option that American adults have always relied on—contingent, low-paying jobs—and will lose one of the few remaining accomplishments of the American working class, retirement.

However, given that defined contribution plans are here to stay, she believes taht there is barely a regulatory framework in place to protect the public interest. She suggests that sensible protections that already govern the investment behavior of defined benefit plan fiduciaries could be a good place to start, including limiting the percent of a portfolio that is allowed to be in the employee’s company’s stock, banning lump sum payments, and mandating worker representation on pension boards.

Source: "The End of Retirement" Monthly Review (May 2006)

Working Longer: Does it Help People Be Healthier, Happier?

Esteban Calvo, a graduate student in Sociology at Boston College and a graduate research assistant at the Center for Retirement Research at Boston College, has published a paper--"Does Working Longer Make People Healthier and Happier?"--that suggests that longer working lives will help most people maintain their overall well-being. The paper addresses the impact of late-life paid work on physical and psychological well-being, and it includes a review of the literature on work at older ages and elderly well-being.

While working longer seems beneficial for most people, it will likely have negative consequences for some. The type of job seems to be a critical factor. Undesirable jobs can wash out the potential favorable effects of work. Another critical factor is the opportunity to continue working. Older workers may be willing to prolong paid work, but, in order to find a job, they need to be able to work and have a real demand for their labor.

Calvo also suggests some areas for future research. In particular, since an increase in the early retirement age reduces the ability of people to voluntarily decide their labor force participation, he wonders whether less control in the work/retirement decision could have an adverse impact on the well-being of older individuals. Also, he notes that variations in the benefits of work as people move through their 60s should be examined--even though work at older ages seems beneficial for many, the benefits may decrease, or stop increasing, after a certain age or amount of time worked per year.

Source: Issues in Brief No. 2 Boston College Center for Retirement Research (February 2006)

United Kingdom: Age Positive Week

Employers across Great Britain were called to join the fight to tackle ageism at work during Age Positive Week (May 8-12). The Week's goal was to challenge ageist stereotypes at work and promote positive examples of employers and employees defying ageism.

Source: News Release Age Positive (May 6, 2006)

Survey: Firms Ready to Respond to Challenge of Aging Workforce

According to the latest Leadership Pulse™ survey from Dr. Theresa M. Welbourne of eePulse, Inc. and the Ross School of Business, University of Michigan, usinesses are ready to respond to the 17% of the U.S. workforce that will be 55 and older by 2010. The study was designed to understand the current effects of the aging workforce (AWF) and readiness to address future AWF issues.

Specifically, of the 369 general managers to C-level executives surveyed, 62% are ready to retain older workers, 49% are ready to recruit older workers, 43% agree that the AWF currently affects their organization’s culture, 42% agree that the AWF currently affects the quality of talent in their organization, and 41% agree that the AWF currently affects their ability to compete in their particular industry.

A powerpoint presentation of preliminary results is also available.

Source: News Release ClickPress (May 8, 2006)

Commentary: Companies Must Look Across Generations and Borders for Talent

Building on the results of the Human Capital Institute's survey of HR executives, its executive director Allan Schweyer writes that "the winners of the war on talent will welcome talent of all ages and varieties, and they will build their networks into the farthest reaches of the planet." Given the widespread shortages of talent that are already occurring across the country, he finds a strange paradox in the survey findings taht While more than half of the executives agreed that the aging workforce is an issue that must be dealt with because it will lead to a workforce shortage, less than one-quarter said that the aging of their workforce is an issue that is strategically very important to them.

It is imperative that executives and senior managers, from small, mid-size and large firms, understand the implications of our aging and diversifying domestic talent pools as well as the dynamics of a global workforce that is expanding at lightning speed. For human resources leaders, knowledge of best practices in retaining older workers is key. For recruiters, knowledge of top sources for recruiting the diverse workforce and of the factors that appeal to diverse recruits is critical.

Source: "Build Talent Pipelines Across Generations, Cultures and Borders" Inc.com (May 2006)

Reverse Job Fairs for Older Workers

A “reverse” job fair has been held at the Metro Career Center in San Diego, at which job seekers 55 and older stood by while employers approached them to check job qualifications and to talk. The event was put on by Community Options, a federally funded group that has a program to help low-income older people with job training and placement, and by the Oasis Institute, a private nonprofit organization partially funded by a grant from AT&T that helps older individuals with career and education opportunities.

According to an article by Michael Kinsman, Community Options and Oasis teamed up to coach the workers on job-search skills and some personal computer training over a four-month period so they would qualify for a variety of jobs. Charlotte Tenney, a Community Options senior employment counselor said “We thought it might make a difference to teach job candidates how to sell themselves to the employer.” Tenney came up with the idea of having employers approach individuals: “We really wanted to try something different.”

Source:"At this job fair, older workers waited for employers to visit" San Diego Union-Tribune (May 7, 2006)

Removing Obstacles for Older People Looking for Work

Randi F. Marshall, writing for Newsday, tells stories of both why finding work is tougher for older people and what employers can gain by clearing away the obstacles. Despite the efforts of many older people seeking work to e-mail resumes and learn new skills, Marshall says that "some mature workers have come across roadblocks that younger job-seekers haven't encountered. Employers, said some experts, look only at the immediate price tag--in salary, medical benefits, pensions and other areas--and not at the benefits of hiring the over-50 crowd."

Perhaps the most difficult part of the process is the interview. It's hard for older job- seekers to sit across from an interviewer who is 20 years younger than they are, or to look around at a roomful of job-seekers who are just out of college--especially when their last interview may have been more than 20 years ago.

However, one staffing firm quoted by Marshall, advises that interviews should focus on what a worker can bring to the company and the worker's knowledge about that company--not the worker's previous experience.

Source: "A job in itself" Newsday (May 6, 2006)

Large U.S. Businesses Continue To Shift Ffrom Traditional Pensions

Watson Wyatt Worldwide has reported new analysis showing the largest U.S. companies continued to shift from traditional pensions to 401(k) plans in 2005. Specifically, it found that only 37% of Fortune 100 companies offered a traditional pension plan to new hires in 2005, down from 42% in 2004, 50% in 2002, and 89% in 1985. At the same time, the percentage of companies offering workers only a 401(k) or other type of defined contribution plan increased to 36% in 2005, up from 25% in 2004 and 17% in 2002.

In light of these results, Watson Wyatt Worldwide urges Congress to act on long-standing funding and regulatory issues affecting pensions. At the same time, the firm’s experts say employers should get a true reading of their plans’ cost structure and of related workforce management issues before making plan changes.

Source: News Release Watson Wyatt (May 4, 2006)

Case Study: Shadowing Program for Boomer Succession Plans

According to an article written by Barbara Rose of the Chicago Tribune, International Truck and Engine Corp. started a program of assigning younger employees to "shadow" veterans before the older workers retire in 2004 after a report to the company's board showed that half its 600 managers and executives would be eligible for retirement within five years. As Dan Ustian, chairman, the company's president and chief executive officer, said: "All that knowledge is really important--the culture, the relationships with customers. It’s vital we get a head start."

Among other things, bosses at International were coached on how to initiate talks with retirement-eligible employees without running afoul of age discrimination laws. They asked questions such as, "Where do you see yourself in five years?" and, "Are there other positions you'd consider?" "Many of the conversations are about trying to get them to stay and groom a successor," said Greg Elliott, vice president for corporate human resources and administration. Then, the company would work with the retiring employee; for example, with one senior executive, his package, which included a retention bonus, kept him on 12 months, long enough to identify a successor and complete a six-month process of job shadowing.

Source: "Preparing for the baby boomer brain drain" Portsmouth Herald (May 3, 2006)

Canada: Pension Crisis Deepens

According to the 3rd annual pension risk survey by The Conference Board of Canada and Watson Wyatt Worldwide, 61% of Chief Financial Officers (CFOs) say the pension crisis in Canada is widespread and likely to persist beyond the next few years. In addition, only 19% said the crisis is widespread but unlikely to become permanent--down from 23% in 2005 and 39% in 2004, and just 15% said the pension situation is isolated to relatively few organizations.

Source: News Release Conference Board of Canada (May 2, 2006)

Japan: Older Workers Retunring to Labor Force

David Pilling, writing in the Financial Times, reports that people over 60 are being drawn back to the workforce as it rises for the first time in eight years. "The willingness of those who left the jobs market to re-enter also shows the mechanisms by which the labour market might respond to the challenges of an ageing society, which is shrinking the size of the traditional workforce."

According to official figures, by last year, there were 9.67m people aged 60 or over either working or looking for work, a 450,000 increase from five years earlier. He also writes that officials from The Bank of Japan say every business sector is now suffering from labour shortages, which could push up wages and lead to further hiring of people who had drifted out of the labour market.

Source: "Japan sees first rise in workforce in 8 years" Financial Times (May 1, 2006)

United Kingdom: Acas Warns Employers To Act Now To Meet Age Discrimination Challenge

Acas, an employment relations organization, has released a guide to help employers and individuals understand how the age discrimination legislation effective October 2006 will affect them. More significantly, Acas warns employers to act now to beat the deadline; according to Acas Chair Rita Donaghy, "A lot of organisations are under the impression that the regulations will not affect them--this simply is not true. Age discrimination can affect employees of any age, not just the young and old."

The Acas pamphlet "Guidance on Age and the workplace" is available for free online.

Source: Press Release Acas (Aprl 27, 2006)

Survey: Employers Contemplating Changes in Retiree Drug Benefits

According to a survey developed by Towers Perrin and conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS), a number of employers sponsoring post-65 retiree medical programs are rethinking their prescription drug strategies for 2007, and there’s greater interest in approaches that do not involve taking the Medicare Part D subsidy. In particular, the survey showed that 65% of plan sponsors chose to retain a prescription drug benefit and take the subsidy in 2006, 63% said they had not decided on how to respond to Medicare Part D beyond 2006. The two most popular choices for those (37%) with a 2007 strategy are to offer a supplemental plan in coordination with Medicare Part D plans available in the market and to arrange to offer a specific Part D plan. In addition, 12% indicated that they planned to eliminate all retiree medical coverage in 2007 or eliminate prescription drug coverage.

Source: "Employers With Retiree Drug Benefits Charting Different Courses for 2007" Towers Perrin Monitor (April 13, 2006)

Analysis of Aging Workforce Suggests Declining Economic Value for Many Firms

Francesco Daveri and Mika Maliranta presented their paper "Age, Technology and Labour Costs" at 43rd Economic Policy Panel Meeting in Vienna (April 20, 21, 2006). According to their abstract, the paper seeks to answer the question "Is the process of workforce aging a burden or a blessing for the firm?" by providing evidence on the age-productivity and age-earnings profiles for a sample of plants in three manufacturing industries (“forest”, “industrial machinery” and “electronics”) in Finland.

Our main result is that exposure to rapid technological and managerial changes does make a difference for plant productivity, less so for wages. In electronics, the Finnish industry undergoing a major technological and managerial shock in the 1990s, the response of productivity to age-related variables is first sizably positive and then becomes sizably negative as one looks at plants with higher average seniority and experience. This declining part of the curve is not there either for the forest industry or for industrial machinery. It is not there either for wages in electronics. These conclusions survive when a host of other plausible productivity determinants (notably, education and plant vintage) are included in the analysis. We conclude that workforce aging may be a burden for firms in high-tech industries and less so in other industries.

On the more optimistic side, they do note in the paper that "older workers int eh future will be likely more educated than they are today and therefore, as also implied by our results, they may be more apt to deal with the Next Big Things."

A draft of Working Paper No. 309 is available on the IGIER website.

Source: Abstract Innocenzo Gasparini Institute for Economic Research (IGIER) (April 11, 2006)

Burgeoning Number of Older Women Being Forced Back into the Workplace

Writing for the Chicago Tribune, Bonnie Miller Rubin tells the story of how women are particularly vulnerable to the eroding retirement backstops--Social Security, company pensions and personal savings--because they tend to start working later, earn less and live longer. Citing U.S. Department of Labor statistics that show that the number of women over 65 in the workforce has increased by 38% since 1980, while male participation has remained stable, she shows how ill-prepared many women are for this stage of life, which can stretch two decades beyond age 65.

Women's lifetime earnings look different on average than those of men. Women are concentrated in low-wage or part-time jobs and can lack experience dealing with financial matters. They are more apt to drop out of the workforce to be a caregiver, resulting in more meager assets. Such reasons help explain why older women are flocking to job fairs and filling out applications in record numbers, experts say.

Rubin quotes Cindy Hounsell, president of the Women's Institute for a Secure Retirement, who testified about the retirement gender gap before the Senate Committee on Aging, that as saying that it is a "startling post-retirement picture for millions of women who have worked their entire lives."

Source: "More working women find they can't afford to retire" Chicago Tribune (April 24, 2006) Need to register (free)

Global Retirement Survey Shows Traditional Retirement Model Weakening

People want to abandon traditional models of retirement in favour of self-sufficiency and a mix of work and leisure, according to what HSBC Holdings calls "the largest global survey into attitudes towards ageing and retirement ever conducted." Following up on its initial survey released in 2005, HSBC expanded its survey to cover 20 countries. From its survey of 21,000 people and 6,000 companies, the survey finds, among other things, that:

• 43% want to self-fund retirement
• 36% support compulsory saving for retirement--the first choice option for funding later life
• 72% want to scrap mandatory retirement
• 49% of employers recognise the high value of older workers, but many lack the practices to attract and retain them

Stephen Green, Group Chief Executive, HSBC Holdings plc, said HSBC's research “shows that individuals increasingly expect to bear their own costs in later life, but governments and business must understand their role in continuing to support individuals. They cannot afford to shy away from the enormous challenges and opportunities presented by global ageing.”

Future of Retirement: What the world wants, written in conjunction with the Oxford Institute of Ageing, is available for download as either an executive summary, a consurmer report, or an employer report. In addition, country-by-country summaries are available at The Future of Retirement website.

Source: News Release HSBC Holdings plc (April 26, 2006)

Older Workers Underappreciated in Workplace

According to a survey by Randstad USA, 91% of employed U.S. adults said they have not saved enough money for a comfortable retirement, and 40% expect to continue working after retiring from full-time work. More importantly, the survey shows some possible compatibility issues with younger workers that employers need to be prepared to appropriately address--while three-quarters of experienced workers (ages 55 years and older) said they relate well to younger co-workers, only 56% of all employees surveyed said they relate well to older workers. "In fact, a total of 77% said younger employees do not seek advice and guidance from employees over age 50."

Genia Spencer, managing director of operations and human resources for Randstad USA, offers the "ABCs" of how to bridge the generation gap among employees:

• Avoid any age-based assumptions about employees and recognize that all of your colleagues will potentially bring different and insightful ideas to the table.
• Be open-minded to learning new ways of doing things and be receptive to time-tested ideas.
• Create an environment where all employees have a meaningful opportunity to contribute.

Source: News Release PRNewsWire (April 26, 2006)

Unpaid Leave Helps Middle-aged Caregivers Keep TheirJobs

As the nation ages, so does the psychological distress endured by both men and women caregivers, according to Indiana University sociologist Eliza Pavalko. In a new study--"Combining Care Work and Paid Work: Do Workplace Policies Make a Difference?"--published in the May issue of the journal Research on Aging, Pavalko and co-author Kathryn Henderson found that while middle-aged women who become caregivers for an ill or disabled family member are more likely to leave their jobs altogether than reduce their hours, unpaid family leave, of all family-friendly benefits, proved most useful in helping caregivers keep their jobs.

These findings comes in the face of two trends, a workforce that is both increasingly female and aging, meaning that more and more working men and women will encounter the challenges of caring for parents and other loved ones. During the six-year study period, 13 percent of the employed women surveyed provided substantial levels of care for ill or disabled family members at least once. Caregivers who leave the workforce not only experience the immediate loss of their income and other employment benefits but face the prospect of reduced Social Security benefits later in life.

"Despite growing attention to family-friendly policies in the workplace, we know surprisingly little about whether they help families manage the burden of care work," Pavalko said. "Employers may be particularly interested to find that the relatively inexpensive benefit of unpaid family leave is so effective for reducing employee turnover."

An interview is available with Pavalko from Inside Indiana Business.

Source: News Release Indiana University (April 24, 2006)

Federal Reserve Study to Show Impact of Baby boom Retirement

A new Federal Reserve study, to be published in July, finds that the retirement of the Baby Boom generation will force far-reaching adjustments in the way the economy works. Preliminary results of "The Recent Decline in Labor Force Participation and its Implications for Potential Labor Supply" from The Brooking Institution suggest that forecasts for everything from growth and employment to corporate profits and interest rates will have to be recast.

According to a report on the preliminary results from Bloomberg, the study has shaken economists' forecasts by suggesting the U.S. economy will have to decelerate much more over the next decade than most now expect. "The study projects what the authors call a 'conservative' 3 percentage-point decline over the next 10 years in the labor force participation rate--the percentage of people who are either working or looking for work." However, other economic forecasts predict much smaller drops in the participation rate.

Source: "`Revolutionary' Fed Study Has Economists Rethinking Forecasts" Bloomberg.com (April 13, 2006)

Wisconsin: Why Retirees Are Still Working

Maureen Wallenfang, writing for the Appleton, Wisconsin Post-Crescent, tells the tales of a number of Fox Cities area seniors who have said no thanks to retirement. While some do it for the money, others do it to stay connected. Thus, for example, the retiremetn advice of one of the seniors she talked to was "Don't do it." "'Cut back instead. Keep your finger on what you've done all your life. It's part of you. That's so important,' he said. 'The heart attacks come when you're bored.'"

The paper also ran a companion piece by Wallenfang about how "Some seniors returning to work force need retraining."

Source: "Plenty of older workers on the job" Appleton Post-Crescent (April 23, 2006)

Commentary: Aging Workforce Triggers Need for Business Intelligence

Dr. Ramon C. Barquin, President of Barquin International, believes that business intelligence will play a pivotal role in dealing with the ramifications of the aging of our nation’s population. Writing for the Business Intelligence Network, he says that the aging population will have a direct impact on the workforce--there "will not be near as many arms and legs to do the nation’s work. We will have to import more people, outsource the work abroad or find different ways to do the actual work. In all probability, we will do a combination of the three across the industrial spectrum, but there will be significant impact and change on the workplace."

However, rather than heralding the news that America is aging, Barquin says that it is important to point out enterprises--as well as the nation as a whole--have to start making decisions for which business intelligence will play an important assisting role. "What are we going to do about the shrinking workforce? Do we outsource more work? Do we increase immigration? Do we restructure work processes? How? What? When? Where? Only through the rigorous and methodic application of business intelligence can we actually get the answers right."

Source: "Business Intelligence and the Aging" Business Intelligence Network (April 13, 2006)

First AARP "2020 Vision Forum" Focuses on How the Aging of the Boomers Impacts the Workforce

The AARP launched its opinion leader "2020 Vision Forum" Series with a "Boomers and the Workplace Revolution" forum designed to stimulate debate with key workforce stakeholders on the demographic shifts and trends of the 50+ workforce. At this forum, business, academic and community leaders heard how boomers are reshaping the American workplace. An interactive discussion examined how we as a society can best go about ensuring that suitable work opportunities are available to retain an older workforce as the pool of younger workers shrinks while encouraging employers to expand employment opportunities, training and flexible or "phased" retirement options to retain their boomer workers.

AARP CEO Bill Novelli hosted a panel discussion of leaders in business and education, moderated by CNBC's Maria Bartiromo. Panelists included Ramani Ayer, Chairman and CEO of The Hartford, Jane Friedman, President and CEO of HarperCollins, Daniel Pink, Wired magazine contributor and author of Free Agent Nation, and Dr. Shirley Pippins, President of Suffolk County Community College.

A recorded webcast of the forum is available for viewing.

Source: News Release AARP (April 19, 2006)

For a news story from the forum, see New York Daily News.

Commentary: Hopes for Working Retired Not Panning Out?

Beverly Goldberg, vice president and director of publications at The Century Foundation and the author of Age Works: What Corporate America Must Do to Survive the Graying of the Workforce, believes that "the magic bullet of working retired that would allow those workers who have not saved enough for retirement or whose pensions have disappeared in the collapse of the Enrons and bankruptcies of airlines seems to be a dud." Despite the interest shown by human resource managers, the growth in the number of those working retired has not met expectations.

Goldberg says that buy-outs of older workers still abound and the costs of health care for older workers make employers resistent to finding ways to hold on to them. In addition, "many jobs have changed so much that the skills of most older workers are irrelevant, and training is seldom offered to older workers." Companies are also "opting to invest more in machinery and automation to reduce the need for older workers." One result is that many employees are just hanging on to their current jobs as long as they can.

Source: "Working Retired: An Idea Whose Time May Never Come" The Century Foundation (April 19, 2006)

Commentary: Immigration as Solution to Aging Workforce

In her regular "My Time" column in the Washington Post, Abigail Trafford argues that with "more people living longer and couples having fewer children, the influx of immigrants--who tend to be young adults--helps stabilize the balance between generations." In fact, immigration postpones the day of reckoning "so that we can start the debate now and develop a national blueprint to meet the needs of our aging population."

Source: "Immigration Is An Aging Issue" Washington Post (April 18, 2006)

Canada: Business and Labor Form Alliance To Tackle Challenges Arising from Aging Workforce

As part of a country-wide initiative called the “Workplace Partners Panel” created as a response to labour and business concerns about the need for a collaborative approach to address Canada’s labour market challenges, leaders of Nova Scotia's labour and business sectors are meeting to discuss potential solutions to Nova Scotia’s labour market challenges arising from an aging workforce.

Rick Clarke, President of the Nova Scotia Federation of Labour, and Elizabeth MacDonald, former Vice-President of Enterprise Services for Emera Inc., are chairing a “dialogue session” with the province’s business and labour, community, and government leaders, including representatives from the education sector, immigration settlement, youth and economic development.

“What we want is to help identify and document Nova Scotia and the Atlantic region’s best thinking on the issue of skills needs in the context of an aging workforce,” adds Liz MacDonald. “This is a critical issue for Atlantic Canada as the region deals with an aging population, a low birth rate, and the loss of young people leaving the region in search of other opportunities.”

Source: News Release Workplace Partners Panel (April 18, 2006)

Keeping Pace with Managing Multigenerational Workforces

"Managing multigenerational workforces is an art in itself. Young workers want to make a quick impact, the middle generation needs to believe in the mission, and older employees don't like ambivalence." Eric J. McNulty, managing director of Harvard Business School Publishing's conference division, suggests that companies must recognize new attitudes among their workers: "They must acknowledge that new relationships will exist between employees and organizations. And they must open themselves up to revisiting assumptions about which workers are appropriate for which roles and to rethinking the ways in which they hire, motivate, and retain employees." In particular, he recommends looking at the advice of Tamara Erickson and Bob Morison of The Concours Group, who have done extensive research on the changing workforce and the age-based cohorts that compose it.

• Workers under 35: One should rapidly place younger workers into responsible roles to get the most out of these workers before they move on.
• Workers between 35 and 54: Middle cohort workers may have to stay in their roles longer because the cohort ahead of them is retiring later and there are also fewer replacements coming up from below. They need to be reengaged through fresh assignments, mentoring, and knowledge-sharing roles, and even through career switches within the company.
• Workers 55 and over: Companies should get serious about recruiting and retaining older workers for both entry-level and highly skilled work. Ferret out and eliminate the tacit age bias that often exists in hiring and development processes, and craft roles that leverage the expertise of older workers. Think of retirement as an opportunity to keep talent around rather than as a way to phase people out.

Source: "Can You Manage Different Generations?" Harvard Business School Working Knowledge Newsletter (April 17, 2006)

Arkansas Announces Mature Worker Initiative

Arkansas Governor Mike Huckabee has announced a new workforce development program--the Arkansas Mature Worker Initiative. This program will highlight featured employers who have made a commitment to hire mature workers, many of which companies have offices in Arkansas.

“It’s encouraging to see these companies recognize the value of the countless mature workers we have in Arkansas,” said Gov. Mike Huckabee. “I hope more employers see these workers are known to have essential qualities needed for today’s jobs, including loyalty, dedication and responsibility.”

After rolling out a program on the national level, AARP selected Arkansas as a pilot state, and Gov. Huckabee selected the initiative as one of his top priorities for the Arkansas Workforce Investment Board. Several regional meetings will be held across the state to inform employers about the initiative, at which a panel of employers will discuss the initiative and how their companies have benefited from hiring mature workers.

Source: News Release Department of Workforce Services (April 12, 2006)

United Kingdom: Older Workers Filling New jobs

According to an article by Andrew Taylor, the Employment Correspondent for Financial Times, official statistics show that "more than half the jobs created in the past year were filled by people above the state pension age." He reports that various employers’ organisations attribute the rise in the number of working older people to increasing financial pressures created by pensions shortfalls and a growing willingness of employers to take on older staff.

Sam Mercer, director of the Employers’ Forum on Age, said that employers faced with skills shortages were also more prepared to hire older people who were physically and mentally fitter than previous generations. Large supermarket chains, such as Tesco and J Sainsbury, in particular, had made an effort to employ older staff to reflect the balance of society at large and an ageing population that provided many of their customers, she said.

Source: "Older workers take most new jobs" Financial Times (April 12, 2006)

Rising Health Insurance Costs Pressuring Employees Considering Retiring Early

John O'Neil, writing in The New York Times, reports that the evaporation of health benefits for younger retirees will be playing an important role in the final career trajectory of the baby boom generation. "Even more than pensions, they say, retirees' access to health insurance may determine whether the next decade sees an outpouring of late-in-life energy and entrepreneurialism or whether offices will be clogged with workers stuck in their cubicles until they turn 65." In particular, workers need to contemplate having $50,000 to $100,000, or more, to cover health insurance until they qualify for Medicare, assuming they are healthy enough to qualify for insurance at all.

After discussing many aspects of the problem, O'Neil does conclude by pointing out that there are some signs of new alternatives emerging. For example, some states have extended COBRA coverage. In addition, some companyies are exploring the idea of adding or extending health insurance for pre-Medicare retirees, as they try to manage the departure of their baby boom work forces--discovering that a lot of people are hanging around, ready to retire, but they just don't have the benefits."

Source: "Want to Retire Early and Hang a Shingle? It'll Cost You" New York Times (April 11, 2006)

CPA Group Suggests Tough Retirement Years Ahead

A poll conducted by Harris Interactive for the American Institute of Certified Public Accountants (AICPA) shows that 46% of Americans expect to fund their retirement through Social Security and pensions, and an equal number expect that their retirement funds will last them 10 to 20 years. However, 23% have not yet begun to save for retirement, and 47% indicate that while they have started saving, they also admit they have a long way to go.

“A distressing gap exists between the public’s expectations for retirement and the reality," said Carl George, CPA, Chair of the AICPA’s National CPA Financial Literacy Commission and CEO of Clifton Gunderson LLP. "Moreover, too many Americans think they can rely on the Social Security and pension safety net to carry them through. The fact is, Americans must realize they have to take responsibility today for planning and saving for their retirement. Otherwise, they may find themselves working far longer than they anticipated or at a lower standard of living.”

The survey also shows that 39% of survey respondents believe as little as $500,000 will be sufficient to see them through their retirement. However, George noted that when spread out over the course of 30 years, that amount becomes $16,000 a year and would have to take into account uninsured medical costs and other expenses, such as the possibility of assisted living.

Source: News Release American Institute of Certified Public Accountants (April 4, 2006)

Survey: Americans' Retirement Hopes Filled With Holes

According to the Employee Benefit Research Institute (EBRI), a large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect. Published as EBRI Issue Brief No. 292, Will More of Us Be Working Forever? The 2006 Retirement Confidence Survey, EBRI's 16th annual survey, suggests that many have accumulated only modest retirement savings, underestimate the share of their preretirement income they are likely to need in retirement, and have made no estimate of how much they will need to live comfortably once they retire.

By the numbers 24% said they are very confident they will have enough money to live comfortably in retirement, and another 44% said they are somewhat confident. Among the survey's highlights:

• 68% of current workers say they and their spouses have accumulated less than $50,000 in retirement savings--including 88% of those 25–35 and 52% aged 55 and older.
• 66% of current workers think they have some chance that they will live until age 90-—or spend 25 years in retirement, assuming they retire at age 65. However, 58% also think they will have less than 25 years of retirement and another 19% are unable to estimate how long their retirement will last.
• 59% said they hope to have a retirement standard of living equal to or higher than in their working years, but only 58% have actually calculated how much money they will need to retire comfortably.

An Executive Summary of the report is also available.

Source: Press Release EBRI (April 4, 2006)

MetLife Survey Finds Retirement a "State" Not a "Date"

According a new MetLife Mature Market Institute® study, older workers are changing the concept of retirement as they live longer and work well past traditional retirement age--some returning to the workforce after they "retire" and/or opting for "portfolios" of paid and volunteer positions. The study--Living Longer, Working Longer: The Changing Landscape of the Aging Workforce--was conducted by David DeLong & Associates, Inc. and Zogby International and examines the actual work experiences of employees age 55-70.

The study found that 78% of respondents age 55-59 are working or looking for work, as are 60% of 60-65 year-olds and 37% of 66-70 year-olds. The "working retired"--workers have actually accepted retirement benefits from a previous employer and then chose to return to work or seek work--represent 11% of 55-59 year-olds, 16% of 60-65 year-olds and 19% of 66-70 year-olds.

Among other things, the survey found that motives for working differ significantly by age, with economic incentives taking precedence among workers age 55-59 (72% of them citing "need income to live on" as a primary reason for working), but narrowing for 60-65 year-olds (60% citing this reason, followed by a desire to "stay active and engaged" (54%) and "do meaningful work" (43%)), and nearly disappearing among 66-70 year-olds, 72% of whom cited the desire to "stay active and engaged" as a primary reason to work, followed by "the opportunity to do meaningful work" (47%) and "social interaction with colleagues" (42%).

Source: Press Release MetLife (April 3, 2006)

Seminar Offered on Managing Health and Productivity of Aging Workforce

The Disability Management Employer Coalition (DMEC) has announced its 2006 Management Series of half day seminars that provide employers with practical problem-solving tools. This year's schedule includes an offering on "Health and Productivity Management with an Aging Workforce," sponsored by UnumProvident. This seminar will:

• Define current health, productivity and economic patterns related to an aging work force
• Illustrate the labor market dynamics that impact hiring, retention and retirement over the next decade
• Present the building blocks of a productive aging program as part of corporate based disability management, benefit design and human resource management strategies.

It will be offered May 18 in Atlanta, GA, May 25 in Newton, MA, September 7 in Santa Clara, CA, September 14 in Tampa, FL, and September 21 in Houston, TX.

Source: Press Release PressWire (April 3, 2006)

Singapore: Survey Shows Over-50's More Committed Workers

An article by Grace Chong in The Business Times reports that recent survey data shows that employes 50 or older show greater commitment and alignment to their companies than their younger colleagues and feel they are better equipped in terms of resources. The findings--derived from Watson Wyatt Worldwide's WorkSingapore study covering about 8,000 employees working in 13 industries--also show that companies with older, and hence more committed, workers see a better financial performance: "Businesses with highly committed workers had an average shareholder return of 23%, while companies with low commitment levels from staff generated returns of only 7%."

Source: "Companies with older workers perform better: study" The Business Times (April 1, 2006)

New Zealand: EEO Trust Launches Survey of Older Workers

New Zealand's Equal Employment Opportunities Trust has launched an on-line survey on how age affects people's experiences at work. Among other things, the survey includes questions about inter-generational conflict, age discrimination, and older people's experiences and preferences at work. According to EEO Trust Chief Executive Dr Philippa Reed, "Older workers are a growing proportion of the labour force so employers looking for the very best people need to know how to create workplaces which suit them."

Source: Equal Employment Opportunities Trust Media Release (March 30, 2006)

Additional Resources: The EEO Trust subsequently issued its finding on this survey.

A Laid-off Older Worker Retrains

Barbara Rose, writing for the Chicago Tribune, tells the story of one 57-year-old worker has started to retrain his hands and his head for a new set of workplace skills after the Chicago lamp factory where he worked for decades closed in 2005. According to her article, he and other Cooper employees qualified for up to 2 1/2 years of unemployment benefits and training through the federal Trade Adjustment Assistance program for workers who lose jobs to foreign competition, but that as few as 15% percent of Illinois workers who are eligible access the training.

"For older workers, a lot of them really question whether they can go back to school," said Rick McHugh, Midwest coordinator for the nonprofit National Employment Law Project.

Source: "Retooling a career, a life" Chicago Tribune (March 31, 2006)

Europe's and Japan's Aging Populations Deterent To Participating in Coming Global Ecnomic Growth

Cisco Systems has released a report showing that, by the year 2020, a new global economic paradigm will emerge defined by the globalization of companies, the increased role of knowledge workers and the personalization of customer experiences as key factors to economic success, with the United States, China and India driving more than half of that growth, while economies of Europe and Japan due to aging workforces or relatively lower levels of productivity will be face challenges.

According to Foresight 2020 Economic, industry and corporate trends, prepared by the Economist Intelligence Unit, the consequences of aging population dynamics will exert a
profound influence on economic development patterns. Some countries will age faster than others. Take the old-age dependency ratios (the over-65s as a share of the population aged 15-64). Whereas the ratio in the EU25 will reach almost one-third in 2020 (it was 25% in 2005), in the US it will rise to only 25%, from 19% in 2005. Japan’s fertility rate, at 1.3 births per woman of child-bearing age, is among the lowest in the developed world. By 2020, the old-age dependency ratio will have risen to 46% (from 29% in 2005). Among the potential risks are slower economic growth, financial-market instability and difficulties in funding pension systems. Countries will have to offset the rising share of pensioners by getting the unemployed into jobs, by making people work longer and by encouraging immigration. More women will be drawn into the workforce, too.

Source: News Release Cisco Systems, Inc. (March 30, 2006)

Canada: Statistics Show a New Retirement

According to New Frontiers of Research on Retirement, a new book released by Statistics Canada, broad social changes are forcing Canadians to rethink their traditional ideas about retirement. Looking at the effect of the baby boom generation's pending retirement, the report centres on four main themes:

• Gender differences: Women are much more likely than men to see retirement as involving more than just getting a pension or stopping paid work.
• Joint retirement: The growing number of women with substantial pension benefits is having a major impact on decisions about retirement in Canadian families. For more and more couples, decision-making is becoming much more complex.
• Maintaining a standard of living in retirement: Amid growing uncertainty about their future financial security, an increasing number of people do not know when they will retire. Others have simply delayed their retirement.
• Flexibilty of retirement paths as some workers opt for self-employment: With a massive wave of retirement looming among baby boomers, the labour supply from older workers will grow in importance. Many will likely choose to become self-employed, making flexible retirement paths more prevalent.

Source: The Daily Statistics Canada (March 27, 2006)

Trucking Industry Getting Help from AARP To Find Older Drivers

In a story for the Worcester Telegram & Gazette News, Martin Luttrell writes that "AARP is hoping to convince some older Americans to step away from their office Macs and into a Mack truck for a second career, hauling freight on the nation’s highways." Working in partnership with the American Trucking Associations and the Truckload Carriers Association, as part of AARP's Alliance for an Experienced Workforce, AARP is recruiting from its membership through AARP the Magazine and the AARP Bulletin.

However, Luttrell says that truck drivers surveyed for his report had mixed responses on how well 50-and-over workers would respond to the program. "Some drivers were enthusiastic, saying that driving is a good second career for someone in an age bracket that has generally good driving skills. Others said long hours, time away from home and low pay would be obstacles."

Source: "AARP, trucking industry seek older drivers to plug hiring gap" Worcester Telegram & Gazette News (March 27, 2006)

Corporate Retiree Health Benefits Continue To Be Scaled Back

Sylvester J. Schieber, director of U.S. benefits consulting at Watson Wyatt Worldwide, writes that the combination of rising health care costs and Medicare coverage means that retiree benefits, as we know them, are disappearing.

As Medicare begins to cover prescription drugs in 2006, the biggest gap in medical benefits for most retirees will be filled. For those 65 and older, coverage from their former employer may no longer be necessary. The large-scale trend away from employer-provided retiree medical benefits not only will continue; it's likely to accelerate.

While the bottom line is that U.S. companies that finance retiree medical benefits are at a competitive disadvantage compared to other companies in their industry that do not offer the benefits so that, over the long term, the inability to compete on costs may inevitably threaten the viability of any company that provides rich retiree health benefits, there is still a need for insurance coverage by those who retire before age 65. "Our challenge is to develop alternate approaches for workers to accumulate assets to cover their insurance and out-of-pocket health costs during retirement, but to do so in affordable and sustainable ways that allow U.S. companies to compete and continue to serve the needs of future retirees."

Source: "Retiree medical benefits-past, present and future" Employee Benefit News (March 2006)

Knowledge Management and Changing Workforces

Jim Murphy, Research Director for AMR Research, writes that, with the urgency of an aging workforce facing companies around the world, "it’s easy to lose a sense of balance. Stemming the brain drain, for many companies, means putting every ounce of effort into capturing what’s in an employee’s head before she walks out the door. HR organizations exert extraordinary effort here, urging departing employees to use their dwindling time to document their knowledge and cram it into a repository."

However, he says that a lack of consideration for transfer and reuse parts of the knowledge management (KM) process can stymie efforts and that, once in the repository, there’s little guarantee that the valuable knowledge ever emerges again. Thus, companies "have got to think ahead. Better KM strategies must account for and capitalize upon the skills and expertise of the incoming workforce, along with the tools they’re already accustomed to and adept at using.

On April 3, 2006, from 11 a.m. to 12 p.m. EST, AMR Research will conduct a live webcast on The Aging Workforce.

Source: "Harnessing Potential: Knowledge Management and Your Incoming Workforce" AMR Research (March 23, 2006)

Towers Perrin Survey Finds Risks, Challenges wtih Defined Benefit Plans

According to a new Towers Perrin survey of senior financial executives in the United States, more than two-thirds of them believe that available solutions to the major risks posed by defined benefit pension plans are usually too expensive or ineffective. The survey, A Problem in Search of Solutions: A Study of Defined Benefit Pensions, reports that the "potential financial impact of a pension plan on an organization is clearly top of mind among plan sponsors and would be significant enough for many executives to consider freezing their plans." Of those surveyed, 32% had already closed their plan to new entrants.

Cecil Hemingway, principal and head of the Legacy Pension Solutions unit at Towers Perrin, says that the study shows that "these plans are still an important employee benefit at many companies," but that CFOs and other financial executives "see a clear link between plan risk and its potential impact on cost of capital, rating changes and other threats to their business plans." He suggests that, as new solutions become available, "plan sponsors need to expand their abilities to assess and evaluate these choices to ultimately determine which best fits their companies' pension situation." However, comparatively few companies have adopted sophisticated processes for evaluating pension risks holistically and over the longer term.

Source: News Release Towers Perrin (March 22, 2006)

Opinion: Age-Based Salary Questioned

Writing as the "Underground Economist" for Slate, Tim Harford, a columnist for the Financial Times, takes on the decades of economic studies that "have produced the conclusion that average wages increase with age almost until retirement, yet average productivity seems to be flat or perhaps even declining after the age of 50." While he recognizes that seniority wages are probably here to stay as long as it is hard to reward good performance instantly and accurately, he suggests that if wages could track productivity better, as they do for the self-employed, both older and younger workers could be better off:

Young workers can rightly grumble that they are paid a pittance for doing valuable work. Older workers also have good cause to worry: They are being subsidized, but subsidies are expensive, and that means they have every reason to fear the sack. Wouldn't it make more sense for young workers to be paid a bit more, old workers to be paid a bit less, nobody to feel exploited, and nobody to fear premature retirement?

Source: "Fire Grandpa! Hire Junior! - Why older workers are paid way too much, and younger workers way too little" Slate (March 18, 2006)

Pension Freezes: EBRI Research Shows Who’s Affected and by How Much

The Employee Benefit Research Institute (EBRI) has published a new analysis that quantifies how workers are likely to be affected by pension freezes, and how much they would have to save in a 401(k)--whether provided by their employer and/or saved by themselves--to offset the loss of accrued benefits from the pension freeze. According to Defined Benefit Plan Freezes: Who's Affected, How Much, and Replacing Lost Accurals, in the March 2006 EBRI Issue Brief No. 921, how an individual worker might be affected by a pension freeze varies widely, based on the terms and natuyre of each plan, but the data “illustrate the general impact of age and tenure: Older, longer-tenure workers tend to be affected by a pension freeze more than younger workers because they do not have as much time left in their working careers in a 401(k) plan to offset the accrual loss from a pension freeze.”

Generally, the report finds that:

• Workers in career-average pension plans would have to save a median amount of about 7% of their annual salary to replace the lost accrual benefits from a pension freeze;<
• Workers in final-average pension plans would have to save a median amount of about
  8% percent of their annual salary;
• Workers in cash balance plans would have to save about 3% percent of their annual
  salary.

An Executive Summary of the report is also available.

Source: Press Release Employee Benefit Research Institute (March 8, 2006)

Commentary: Raising Social Security Age Wrong Response to Longer Lives

William Saletan, who covers science and technology for Slate, responds to the latest U.S. Census Bureau report on aging with its bad news that we are living longer and its good news that we are staying healthy longer by challenging "the intuitive remedy is to raise the retirement age [for Social Security benefits] well beyond the measly increases currently scheduled."

According to Saletan, inequality in how individuals age means that age is a bad proxy for disability, which is a good proxy for need, and that "abolishing age as a standard of fitness would be fairer than simply raising the eligibility age." In addition, he notes that in encouraging the "young old"--the current, healthier experience of being 65 to 74--to keep working, the ADEA has been effective in rooting out rampant age discrimination. He also points out that U.S. jobs have gotten much less strenuous for 65-year-olds since Social Security was created m 1935.

Source: "Curse of the Young Old" The Washington Post (March 19, 2006)

Portion of Older Managers at Restaurants Is Rising

According to a story by Karen Robinson-Jacobs in The Dallas Morning News, although restaurant management has been mostly a young man's game becaue of its long hours, steamy kitchens, and ache-inducing physical demands, "more managers are hawking hamburgers and hash well into their golden years, pulled by sweetened industry incentives and a desire to stay active-–maybe nine-hours-on-your-feet active."

A People Report analysis of data from the U.S. Bureau of Labor Statistics shows that, between 2000 and 2005, the number of restaurant managers ages 25 to 44 dipped from 55% to 54%, while the number of 45- to 64-year-old managers grew from 28% to 33%.

Restaurant companies looking to maintain the skill level found in its veterans are focusing on keeping them on board, said Hudson Riehle, senior vice president for research with the National Restaurant Association.

"It makes sense – particularly at larger companies that have human resource functions that are planning out long term – that when they look ahead, they obviously are going to work harder at retaining those individuals," said Mr. Riehle, mentioning more 401(k) and profit-sharing plans as deal enhancers.

"Unless you have the skill set, customer counts can suffer."

Source: "A little aging helps" Dallas Morning News (March 18, 2006)

Senate Committee on Aging Holds Hearing on Bridging Gender Retirement Gap

On March 15, Oregon Sen. Gordon Smith, chairman of the Special Committee on Aging, held a hearing Wednesday titled "Bridging the Gender Gap: Eliminating Retirement Income Disparity for Women," with a goal of highlighting the challenges faced by women in planning for retirement and to find ways to increase women's savings rates. In his opening statement, Smith pointed out that in addition to earning less than men, many women spend significant periods of time out of the workforce raising children or taking care of elderly parents and are more likely to work part-time or work in industries where employers are less likely to offer retirement benefits. He also pointed to legislative initiatives that he has undertaken to close the geneder gap, as did ranking Democrat Sen. Herb Kohl in his opening statement.

The commitee heard from two sets of witnesses. In the first panel were Jean Chatzky, editor-at-large for Money Magazine and financial editor for NBC’s Today Show, Cindy Hounsell, executive director, Women’s Institute for a Secure Retirement (WISER), Barbara B. Kennelly, President, National Committee to Preserve Social Security & Medicare, and Dr. Jack L. VanDerhei, EBRI Fellow, Employee Benefit Research Institute. In the second panel were Karyne Jones, President and Chief Executive Officer, The National Caucus and Center on Black Aged, Inc., Sara C. Hart, Director, Corporate Benefits, CNF Service Company, and Lynn Rollins, Senior Advisor, Women’s Issues to New York Governor Pataki.

A webcast of the hearings is available online.

In addition, women advocacy organizations, members of Americans for Secure Retirement (ASR), told the Committee about the particulary pressing challenges women face to achieving financial security and independence in retirement. The groups urged the Committee to adopt policies that encourage annuitization as a way to help women ensure a steady stream of income for life.

Source: Press Release Americans for Secure Retirement (March 15, 2006)

OPM Chief Calls for Transitional Emploiyment for Older Federal Workers

According to a report by Karen Rutzick in Government Executive, Office of Personnel Management Director Linda Springer has said that federal employees should be able to work fewer hours in their later career, staving off full retirement. She wants part-time arrangements for longtime federal employees to become common and easier to arrange, as a piece of a plan to cope with an aging workforce in what she termed a "transformation of the mindset."

As part of her agency's commitment to expanding part-time work arrangements, Springer cited a legislative proposal offered in the fiscal 2007 budget, which would remove a penalty to employees in the Civil Service Retirement System for working part-time. The director said OPM is looking to find more ways to promote part-time work.

Springer suggested that many employees want to continue their work in some capacity even after becoming elible for retirement, but "don't want to have to work 40 hours a week." However, she said that instead of boomerangers"--baby-boom generation employees who leave the federal workforce for retirement and then return--she wants employees who "don't leave in the first place," instead opting to cut their hours.

Source: "OPM director pushes part-time work in lieu of retirement" Government Executive (March 14, 2006)

Column: Census Report Brings Good News About Aging

Writing a column for Bloomberg News, Andrew Ferguson hails the good news coming out of the U.S. Census Bureau report on aging. After 20 years of reading "policy weenies" portending national bankruptcy from "the Graying of America, the Aging of the Workforce, the Baby Boom Bust, the Coming Collapse in Unfunded Entitlements," Ferguson hails the picture the Census Bureau presents "of an aging generation that will be working (and paying taxes) longer and placing fewer and less costly demands on the health care and pension systems than we expected."

Source: "An Aging Population Isn't Bad News After All" Bloomberg News (March 14, 2006)

Aging Workers: What To Look for In Workplace Safety

In an article for Occupational Hazards, Robert Pater, managing director of Strategic Safety Associates, argues that, for workplace safety strategists, it is critical to plan for the impacts of an aging work force. In particular, he suggests tht one consider five changes that happen as we age that can directly affect workplace safety:

• changes in balance,
• reduced flexibility,
• impacts on attention, vision, and memory,
• diminishing usable strength, and
• slowing reaction times.

For each of these, he suggests some solutions that transfer skills and methods that will help workers become safer, stronger and more in control, even as they age.

Source: "Safety Catalyst: Boosting Safety With an Aging Work Force" Occupational Hazards (March 13, 2006)

United Kingdom: Report On Employer Practices Relating to Age

The Department for Work and Pensions, in conjunction with the Department of Trade and Industry, has issued "Survey of employers’ policies, practices and preferences" (Research Report 325), which explores the extent to which current employment policies and practices accord with equal opportunity with respect to age.

The report provides findings from a quantitative survey of around 2000 employers in Great Britain, and was designed as a baseline to evaluate the effects of the Employment Equality (Age) Regulations that take effect in 2006. It provides information on practices relating to equal opportunities, pay and benefits, retirement, recruitment, appraisal, training, promotion and redundancy as well as attitudes and awareness.

Source: Press Release Department for Work and Pensions (March 9, 2006)

Germany: Incentives Announced To Encourage Staying on the Job

In response to criticism of the government's plan to raise the retirement age to 67, Germany's labor minister has announced a package of incentives aimed at helping older workers remain on the job longer. According to an article in Deutsche Welle, Labor Minister Franz Müntefering's "50 plus" plan includes state bonuses to support elderly workers in low-wage jobs and financial incentives for employers willing to hire people over 50.

Demographic forecasts indicate Germany's population is greying rapidly, with the age increase accompanied by a decrease in the number of working people who pay into social security. That is making it difficult for the state's pension system to cover growing retirement costs. In the view of Müntefering and his colleagues in the governing coalition of Social Democrats and the Christian Union bloc, getting more people to work longer seemed like the right idea.

Source: "Government Unveils Plans to Keep Seniors Working Longer" Deutsche Welle (March 9,2006)

Census Bureau Highlights Dramatic Changes in U.S.Aging

The U.S. Censusu Bureau has issued a report commissioned by the National Institute on Aging (NIA), a component of the National Institutes of Health, that shows that today’s older Americans are very different from their predecessors, living longer, having lower rates of disability, achieving higher levels of education and less often living in poverty. Among other things. according to "65+ in the United States: 2005", the proportion of Americans with at least a bachelor’s degree grew five-fold from 1950 to 2003, from 3.4% to 17.4% and by 2030, more than one-fourth of the older population is expected to have an undergraduate degree.

Work and retirement was a major focus of the economics section of the report, including such topics as labor force participation rights, transitions to retirement, the work status of older workers, the health, wealth, and education of older workers, reasons for retirement, retirement preparedness, and retirement of the baby boom generation.

Source: Press Release US Census Bureau (March 9, 2006)

Intel Chairman Says IT Industry is Ageist

According to a story by Tom Espiner for ZDNet UK, Craig Barrett, chairman of the board of Intel, criticised the IT industry for being ageist when it comes to recruitment and urged older IT professionals to combat this bias by retraining. Barrett, speaking at roundtable event in conjunction with Age Concern, said "[w]orkplaces should recognise the need for skills, as opposed to having to train people from scratch." and that businesses should focus on ongoing training for staff so they don't become obsolete, while governments should subsidise retraining for the over 50's.

But IT professionals also need to play a role in their own training according to Tristan Wilkinson, the UK public sector director for Intel told ZDNet UK. "If your skill-set is associated with a technology that's approaching the end of its natural life, then you are faced with a choice — you can reskill [sic], or you can follow that technology to the end," he said. "You need to audit yourself and be aware of changes in technology."

However Industry watchers have warned that public sector organisations as well as banks and other financial services companies face a potential legacy skills time bomb. As an aging population of technology workers retire, there could be a severe lack of expertise in programming languages such as COBOL and Fortran.

Source: "'IT industry is ageist' says Intel chairman" ZDNet UK News(March 9, 2006)

United Kingdom: DTI Issues Final Age Discrimination Regulations

The final measures to outlaw age discrimination in the workplace in United Kingdom have been published by Trade and Industry Secretary Alan Johnson today. According to Johnson, "Ageism will affect more people, at some stage in their lives, than any other form of discrimination. But until now the law of the land has allowed it to continue. With these new regulations it will become illegal for workers to miss out on recruitment, promotion or training because of prejudice about their age"

Among other things, the regulations will:

• ban age discrimination in terms of recruitment, promotion and training;
• ban unjustified retirement ages of below 65; and
• remove the current age limit for unfair dismissal and redundancy rights.
• provide a right for employees to request working beyond retirement age and a duty on employers to consider that request;
• require employers to give at least six months notice to employees about their intended retirement date.

At the time of this posting, the final regulations had not yet been posted to the web, but a draft version was available.

Source: News Release Department of Trade and Industry (March 9, 2006)

Russia: Putin Standing By Pension System in Face of Declining Population

According to a report from Lisa McAdams on Voice of America, no country faces as severe a population decline as Russia. "According to the most recent forecasts, Russia's population of 143 million people is expected to decrease by 22% between now and the year 2050. If the figures are borne out, Russia could lose up to 42% of its active working population." Nevertheless, Russian President Putin recently rejected calls to abolish Russia's state pension fund and return to a more Soviet-style system, whereby the elderly would rely on their children, rather than the state, for essential support.

President Putin says Russia will never abandon the pension system. Instead, he says, his government is looking at ways to make it better, especially the question of how to increase today's contributions to the fund so that it can keep up with the expected rise in demand for payouts, with nearly 20 percent of the Russian population now 60 years of age or older.

Source: "Russia Losing Battle in Population Growth to Disease, Low Birth Rates" VOA News (March 8, 2006)

Are the "Best Companies To Work For" Ageist?

According to research carried out by Dr Sharon Bolton, Lancaster University Management School, the annual "The Sunday Times Best Companies to Work For" do not generally reflect age diversity. While companies in the list use it as a tool to position themselves as "employers of choice" and they appear to offer the magical formula of making work fun, Bolton suggests that this "party" culture is also an exclusive club for the under 35's. Analysis of The Best Companies to Work For 2005 reveals that, on average, 56% of employees working for "best companies" are under 35 and only 6% over 55 years old, compared to only 36% of the general working population being under 35 and 15% over 55.

“Top 100 companies are defined by their approach to best practice people management and described by the Department of Trade and Industry (DTI) as a ‘key benchmark’. If these companies are the ‘best’ then they should be investigated as to how this links to the ‘best’ for a diverse workforce. Currently, there is no scrutiny of issues such as gender, race and disability. Given the references to the aging workforce, a demographic time bomb and growing structural inequalities, the UK government should be pointing out that the ‘best’ companies are missing out on some of the ‘best’ the UK labour market has to offer.”

Source: News Release Lancaster University Management School (March 7, 2006)

Labor Department Solicits Grant Applications for Senior Community Service Employment

The Employment and Training Administration of the U.S. Department of Labor has published a notice of availability of funds and solicitation for grant applications for the national grants portion of the Senior Community Service Employment Program. $341 million is being made available for projects that will promote part-time work-based training opportunities in local communities for unemployed, low-income individuals who are age 55 and over, and will foster increased prospects for their economic self-sufficiency. SCSEP is the only nationwide Federal program that focuses on training and placing older individuals into community work-based training and unsubsidized employment.

DOL is especially interested in organizations that demonstrate a partnership with local One-Stop Career Centers and community colleges and that promote employment through high growth job opportunities. Applicants are required to apply for contiguous locations within a state.

The closing date for receipt of applications is April 17, 2006. Full details are available on the DOL website.

Source: Summary Federal Register (March 2, 2006)

U.S. Labor Secretary Opens SAVER Summit To Develop Strategies for Enhancing Retirement Security

The U.S. Secretary of Labor Elaine L. Chao opened the 2006 SAVER Summit by challenging delegates to develop strategies for enhancing retirement security. The Summit is to address obstacles to savings faced by four groups-—new labor market entrants, low-income wage earners, small business employers and their employees, and workers nearing retirement.

Chao's address focused on President Bush’s agenda on pension reform and the Administration’s commitment to work with Congress to pass pension reform legislation that "strengthens the funding of pension plans, provides transparency of information for workers, and stabilizes the federal pension insurance system." Secretary Chao also stressed the importance of access to professional investment advice to improve the choice, control and confidence workers have in their retirement saving plans.

Source: News Release U.S. Department of Labor (March 1, 2006)