Commentary: Dire Forecasts for Boomers Overstated

Julie Kosterlitz and Marilyn Werber Serafini, staff correspondents at National Journal, have opined in an article is based on a recent item in that magazine that "the graying of America may not be the fiscal disaster that the deficit hawks project. The nation may age a good deal more gracefully than advertised, thanks to American ingenuity, adaptability and an increasingly hardy group of elderly." With respect to working life, they say that baby boomers are likely to work longer than preceding cohorts and that a decades-long trend toward earlier exit from the workforce appears to have ended.

Already, some private and government programs are encouraging this trend. The Civic Ventures think tank, which hopes to inspire a movement for paid and unpaid "second careers" in social action, is planning to offer five $100,000 awards in June to people over 60 who devise new ways to tackle social problems. The seniors' group AARP is collaborating with about two dozen companies to connect Americans over 50 with jobs. IBM recently started encouraging senior workers to become math and science teachers, offering them tuition and stipends while they student teach or mentor students online.

Source: "Hold off on the boom-and-doom talk" Los Angeles Times (Janauary 16, 2006)

Singapore: Low Wage Workforce Bonuses Help Older Workers

Farah Abdul Rahim, writing for Channel NewsAsia, reports that older, low-wage workers have given a thumbs-up to the billion dollar workfare assistance proposal unveiled by the Ministerial Committee on Low-wage Workers aims to give this group of workers the leg up, with a one-off bonus and more training. While the cleaning industry was the first industry to reap the benefits of the Job Re-Creation Programme, which saw workers receive training and a new image to help boost their wages, the program's scope and depth were being extended so that low-wage workers can climb up the career ladder easily to become supervisors, better their career prospects and more importantly, bring home more pay. "The aim is to expand the programme to nearly all sectors, including building and maintenance, and new growth areas like tourism."

Source: "Older, low-wage workers welcome workfare package" Channel NewsAsia (January 12, 2006)

Sheriff Backs Down On Using Older Workers from Senior Employment Program

In December, according to an article in the Richmond (IN) Palladium-Item, the Union County commissioners agreed to participate in Experience Works, the federally-funded senior workforce program. Residents age 55 or older who have limited income and want to work are eligible, and Sheriff Steve Leverton was reported to have "said he would use the workers to serve civil paperwork ordered by the court, primarily in the evenings and weekends. Senior workers also could do prisoner transport, especially those coming to court from state prisons." However, Leverton subsequently learned that the work he had planned is considered too dangerous.

Source: "Sheriff's plans for senior help scrapped" Richmond (IN) Palladium-Item (January 12, 2006)

Companies Lose Confidence in Workers’ Ability to Save for Retirement

Hewitt Associates is reporting that, despite continued efforts to educate employees on the importance of saving for retirement, many companies do not feel workers are stepping up to the challenge. According to Hewitt's study of more than 220 large U.S. companies, only 6% are confident their employees will take accountability for their own retirement future this year, down from 12% in 2005. "To address these concerns, an increasing number of companies are implementing automated features that make retirement saving a reactive decision rather than a proactive one." Specifically, 23% are very likely to add automatic enrollment features in their 401(k) plans by the end of the year, 13% are very likely to add contribution escalation features, and 20% plan to add automatic rebalancing of 401(k) accounts.

Source: News Release Hewitt Associates (January 10, 2006)

Older Workers Less Likely To Work Under Influence of Alcohol

Workplace alcohol use and impairment directly affects an estimated 15 percent of the U.S. workforce, or 19.2 million workers, according to a recent study conducted at the University at Buffalo’s Research Institute on Addictions and reported in the current issue of the Journal of Studies on Alcohol. However, "working under the influence of alcohol or with a hangover was more prevalent among younger workers compared to older workers."

Source: News Release University at Buffalo Research Institute on Addictions (January 9, 2006)

AARP Campaigns To Repeal Social Security Offset Provision in State Unemployment Laws

According to an article by Diane E. Lewis in The Boston Globe, AARP has launched a campaign to encourage Massachusetts and eight other states to end state laws that deduct a portion of older workers' weekly Social Security payments from their unemployment benefits. According to AARP, laws in theses states, which include Rhode Island, Maine, Colorado, Ohio, Utah, Illinois, Louisiana, Minnesota, and South Dakota, cause such workers to forfeit $7.5 million per year.

"Two legislative proposals in Massachusetts could lead to a repeal. One, filed by House Minority Leader Bradley H. Jones Jr., a North Reading Republican, would provide enhanced jobless benefits to laid-off older workers. A second bill, filed by Senate Minority Leader Brian Lees, a Republican representing the First Hampden and Hampshire district, would eliminate the Social Security unemployment insurance offset."

Source: "AARP hits law that cuts elders' jobless benefits" The Boston Globe (January 10, 2006)

Connecticut Manufacturers Cannot Fill Jobs--Aging Workforce A Big Factor

According to the "2005 Survey of Current and Future Manufacturing Jobs in Connecticut," conducted by the Connecticut Business & Industry Association, Connecticut manufacturers are having difficulties filling job openings because of the lack of skilled workers looking for employment with many manufacturers saying that the state’s aging workforce, combined with the inadequate skills of job candidates entering the workforce, will make the problem worse within the next five years.

The median age of manufacturing employees nationwide is 42. Connecticut’s workforce has a median age of 37.4 years, ranking it as the seventh-oldest workforce in the nation. More than three-quarters of Connecticut manufacturers say they expect up to 20 percent of their employees to retire within five years. And 94 percent expect to replace at least some of their workforce by 2010 due to employee retirements.

Source: News Release Connecticut Business & Industry Association (January 4, 2006)

IBM Changes U.S. Pension Plans Effective in 2008

IBM has announced that it has changed its U.S. defined benefit pension plans and that it plans to redesign its 401(k) savings plan, effective in January 2008. Specifically, as part of IBM's global strategy of shifting the future focus of retirement benefits toward the more predictable cost structure of a 401(k), IBM plans include:

• stopping the accrual of future benefits in the company's defined benefit pension plans, and fully preserving all retirement benefits that employees will have earned as of December 31, 2007;
• redesigning its 401(k) savings plan by giving current pension plan participants an annual company-funded contribution of as much as 10 percent of their pay;
• assisting nonexempt pension equity plan participants to save more by providing an annual special savings award of 5 percent of pay to their 401(k) savings plan;and
• ensuring 100 percent employee participation in the 401(k) savings plan by opening accounts for employees who do not contribute to the plan, and annually depositing the automatic company contribution of 1 to 4 percent of their pay directly into these employees' accounts.

Source: News Release IBM (January 5, 2006)

Switzerland: Firms look to retain their older employees

According to the Tages-Anzeiger newspaper of Zurich, research shows firms including ABB Switzerland are seeking to address an anticipated future shortage in the labour market. The Swiss Employers' Association and the Swiss organisation for the elderly, Pro Senectute, are currently working on guidelines for firms. According to the director of the employers' association, Peter Hasler, workers should be allowed to gradually reduce their working hours before retiring completely.

A spokesman for ABB Switzerland, Lukas Inderfurth, told swissinfo his company was looking at ways of improving its policy towards workers in the 50 plus bracket. "Older workers are becoming more and more important for the firm in view of the evolving demographic situation in Switzerland," Inderfurth said. A key government advisory committee warned in October that a rise in the retirement age was inevitable in the long run, and that the "dogma" of drawing a pension from 65 would have to be abandoned. The government is also in favour of pushing back the age at which workers draw pensions, and has been withdrawing incentives to early retirement.

Source: "Firms look to retain their older employees" swissinfo (January 3, 2006) in English

Manpower Inc. CEO on The Future Of The Global Workplace

Jeffrey A. Joerres, the president and CEO of Manpower, in an interview with The McKinsey Quarterly, says of the aging population that "[d]emographic issues are hard to solve because they require a partnership between government, which is only in office for a period of time, and business, which has its own quarterly issues to deal with." While he notes that France's notion of retraining—having companies set aside money for a training fund—is very proactive, retraining efforts in the United Kingdom and in Australia-—countries that have an aging problem--are further away. In addition, he notes that a majority of older workers are interested in part-time jobs—-not full-time temporary jobs: "People want to work Wednesday afternoon and Thursday morning, not for four months on a project. Getting individuals to think beyond part-time work and to take more responsibility for improving their skills will be absolutely key."

Governments can help with tax schemes, training, payroll subsidies—but, ultimately, I'm afraid there will have to be pain associated with this issue before it becomes institutionalized. Without pain, it's just too easy to keep putting it off for somebody else to solve. But it's not just demographics—you can't forget the pure talent gaps. You're going to find 40-year-olds in the same position as someone who's 60, because the 40-year-old simply lacks the skills the company needs. People can't turn on a dime and change a skill set. You can't be a machinist one day and a nurse the next when you're 60. So the demographic crunch is coming, and it will be exacerbated by the talent crunch.

Source: "The future of the global workplace: An interview with the CEO of Manpower" McKinsey Quarterly (November 2005) Free, but registration required

Attorneys Warn Employers About Discriminating Against Older Workers

Writing for the Knight Ridder Newspapers, Candace Goforth reports that as a result of a recent U.S. Supreme Court ruling making it easier for workers to sue for age discrimination, attorneys are "warning employers to examine their policies to make sure they aren't unwittingly discriminating against older workers and leaving themselves vulnerable to claims." According to Paul Magnus, vice president of workforce development for the nonprofit senior employment group Mature Services, discrimination isn't limited to denying jobs or promotions based on age. Organizations that fail to invest in older workers in the same way they invest in younger ones, namely through training and employee development programs, also may be guilty of discrimination.

Source: "Age bias has major legal consequences" Miami Herald (December 26, 2005)

AARP Study Debunks Myths, Shows 50+ Workers as a Solid Investment

The AARP has released a study prepared by Towers Perrin for AARP that challenges myths about workers 50 and older and shows that those employees often have productive advantages that make them far more cost-effective than is generally believed. According to the report--"The Business Case for Workers Age 50+: Planning for Tomorrow's Talent Needs in Today's Competitive Environment", there is a common business perception that 50+ workers "cost more" than younger workers, but that "the extra per-employee total compensation cost of retaining or attracting more 50+ workers ranges from negligible to three percent in key industries" and "older workers are more motivated to exceed expectations on the job than younger workers." Furthermore, in the case of hiring more older workers, "average age-based total compensation cost differences are negligible and hover around one percent per year for the four positions examined."

Source: News Release AARP (December 21, 2005)

Legislation Introduced To Foster Employment of Workers Forgoing Retirement

Senator Herb Kohl (D-WI) has introduced legislation aimed at expanding opportunities for older Americans and baby boomers to work longer if they so choose. The bill is designed to address problems faced by workers who decide to forgo retirement and businesses who seek to retain the experience of older workers and curb a major workforce drain as seventy-seven million people quickly approach retirement age. The legislation, the Older Worker Opportunity Act of 2005 (S. 1826), is co-sponsored by Senator Richard Durbin (D-IL) and would:

Establish a tax credit to employers who offer flexible or phased work to older workers and protect them from health insurance or pension loss; Extend COBRA health coverage for older workers who lose health coverage due to reduction in work hours; Provide a tax credit for the eldercare of a loved one; Improve access to employment and training services funded under the Workforce Investment Act; Create a Federal Task Force on Older Workers through the Department of Labor in order to examine additional barriers faced by older workers and develop ongoing solutions that are helpful to both businesses and older workers.

Source: News Release U.S. Senator Herb Kohl (October 8, 2005)

New Reports Offer Comprehensive Analyses of Demographics and Working Situations of Older Workers

Two new reports have been released by The Center on Aging and Work/Workplace Flexibility at Boston College and Families and Work Institute based on data from the Families and Work Institute's National Study of the Changing Workforce. The reports were released to coincide with the White House Conference on Aging, which will make recommendations to Congress and the President about issues facing the aging workforce. The first report--"Context Matters: Insights about Older Workers from the National Study of the Changing Workforce"--found that older workers are more likely to continue working when they have more control over their work hours, workplace flexibility, job autonomy and learning opportunities. The second report--"The Diverse Employment Experiences of Older Men and Women in the Workforce"--found that female workers over the age of 50 are at a distinct disadvantage to older male workers in that they earn substantially less than men.

Source: News Release The Center on Aging and Work/Workplace Flexibility (December 12, 2005)

Putnam Study Shows Many Retirees Reentering Workforce

Putnam Investments has released the results of a survey--“The Working Retired: Well Educated, High Income, but They Don’t Own Their Homes"--that shows that about 7 million previously retired Americans have returned to work for pay after an average sabbatical of one-and-a-half years. Most are in a job requiring at least the same skill and experience levels as their prior position. Putnam’s research was based on a national survey of 1,726 retirees who are working; they have an average age of 61. Of the respondents, most (54%) retirees work part time, 36% work full time, and the remaining 10% are looking for work; in addition, two-thirds said they planned to return to work following their first retirement.

Source: Press Release Putnam Investments (December 8, 2005)

Employers Opting to Maintain Retiree Drug Coverage for 2006

Most businesses (79%) that now provide retiree health benefits will accept government subsidies for continuing to provide retiree drug coverage at least as good as Medicare’s coverage when the new drug benefit starts in 2006, according to a new survey by the Kaiser Family Foundation and Hewitt Associates. According to the report--Prospects for Retiree Health Benefits as Medicare Drug Coverage Begins: Findings from the Kaiser/Hewitt 2005 Survey on Retiree Health Benefits, another 10% say that they will provide some drug coverage to supplement the new Medicare benefit, and 9% say that they plan to stop offering drug coverage to Medicare-eligible retirees.

“For many reasons, taking the retiree drug subsidy is the strategy of choice for large companies in 2006, but they will continue to reassess their strategies moving forward as more experience develops with Medicare drug plans,” said Frank McArdle, manager of Hewitt’s Washington, D.C., research office. “Unfortunately, retiree health cost pressures remain intense.”

In addition to providing more detail about employer policies affecting prescription drug coverage, the study shows that surveyed firms report an average increase of 10 percent in total retiree health costs between 2004 and 2005, including both Medicare-eligible retirees and early retirees (under age 65) who do not qualify for Medicare benefits. About one in eight surveyed firms (12%) say that they had stopped offering subsidized retiree health benefits in 2005 for future retirees, mainly newly hired workers.

Source: News Release Kaiser Family Foundation (December 7, 2005)

United Kingdon: Pensions Commission Recommends Raising Retirement Age and Other Reforms

The United Kingdon Pensions Commission has issued its report A New Pensions Settlement for the 21st Century with recommendations to increase the retirement age gradually to age 68 and to implement an integrated set of policies that can ensure that increasing life expectancy becomes not a problem but an opportunity for everyone. Key proposals from the Pensions Commission’s report include:

• The establishment of a National Pensions Saving Scheme into which all employees without good existing provision would be automatically enrolled but with the right to opt out.
  
• Reforms to the state system to ensure a sound foundation on which pension saving can build.
  
• Measures to improve the position of people with interrupted work records and caring responsibilities, who are disadvantaged by the existing contributory system.
  
• Measures to facilitate later working and flexible retirement for those who want it.

Other resources available online include the text and slides of Lord Adair Turner's presentation.

Source: Press Release The UK Pensions Commission November 30, 2005

AARP Expands Featured Employers Program

The AARP has expanded its "Featured Employers" program by collaborating with 11 additional major companies to help Americans aged 50 and over remain in the workforce as desired. In announcing the expansion, AARP CEO Bill Novelli said that "[a]s more and more workers reach traditional retirement age, there are not enough new workers to replace them. We are working with forward-thinking companies who value older workers to offset labor and knowledge gaps. This is a winning strategy for American business, for the older workers themselves and for our national economy."

Source: News Release AARP November 17, 2005

Age Discrimination Visible, but U.S. Businesses Urge Older Workers to Stay on the Job

According to a Hudson survey conducted by Rasmussen Reports, LLC, while 23% of the U.S. workforce knows of an older worker who has been denied a job, promotion, or raise because of age, more than twice as many businesses encourage older workers to stay on the job than to retire early; in fact, 38% of workers say their organizations keep older workers because they are difficult to replace, compared to 15 percent whose firms want to make way for younger workers.

Source: News Release The Hudson Employment Index November 16, 2005

Australia: Industry Not Stepping Up To Challenge of Aging Baby Boomers

A report from ABC Melbourne says that, at a recent seminar sponsored by Monash University’s Australian Centre for Research in Employment and Work, participants were told that, "despite the Federal Government pushing for greater participation of older workers in the labour market, industry is failing to develop proactive approaches for keeping Australia’s baby boomers in the workforce." Dr Glennis Hanley, from Monash University’s Department of Management, said that "[b]usinesses need to employ the broad-based business experiences of baby boomers to foster and transfer cross-generational knowledge as a means of integrating the diverse abilities of today’s heterogeneous workplace." According to Dr Tui McKeown, also from the Department of Management, by 2020 that 50 per cent of the current workforce will have retired and "[n]o action is currently being taken to recognise the skills of older workers." Drs. Hanley and McKeown are conducting research on Will You Still Need Me, Will You Still Feed Me, When I'm 64?.

Source: ABC Melbourne November, 28, 2005