Singapore: Budget Announcement Includes Increased Subsidies to, and Payments by, Employers for Older Workers

According the Ministry of Manpower, the Budget Statement delivered by Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam, contains two measures related to the hiring of older workers. First, starting January 2016, there will be an increase in the Central Provident Fund (CPF) salary ceiling and an increase in CPF contribution rates for older worker, with an additional 1% Extra Interest on the first $30,000 of CPF balances from the age of 55 also being introduced. See "Factsheet on CPF changes to help Singaporeans save more for retirement."

Second, support will be provided to businesses as they continue to restructure. The Temporary Employment Credit (TEC) will be raised to 1% of wages in 2015, or an additional 0.5 percentage points on top of the original TEC. The TEC will also be extended by 2 years, to help employers adjust to cost increases associated with the increase in CPF salary ceiling and the employer CPF contribution rates for older workers. In addition, employers who re-employ older workers aged 65 and above will receive an additional offset of up to 3% of an employee’s monthly wages through the Special Employment Credit (SEC). The SEC enhancement would help manage employers’ overall costs and encourage employers to voluntarily re-employ older workers aged 65 and above. See "Factsheet on the Extension and Enhancement of the TEC and Enhancement of the SEC."

Source: Ministry of Manpower MOM Announcements in Budget Statement 2015 (February 23, 2015)

In the Press: The Straits Times "Older staff may have to forgo pay rise for more retirement savings" (February 27, 2015); "Tight labour market means firms need older workers despite cost hike" (February 27, 2015)

AARP Public Policy Institute Issues Report on Skills Training and Education for Older Workers

The AARP Public Policy Institute has issued a report written by Carl Van Horn, Kathy Krepcio and Maria Heidkamp of the John J. Heldrich Center for Workforce Development, Rutgers, the State University of New Jersey, which explores a range of issues relating to skills training and education for older workers, including the challenges older workers face when deciding whether to enroll in education and training programs, and, if so, how to choose a program and pay for it. "Improving Education and Training for Older Workers" make several recommendations based on its findings related to the vast array of education and training options available to older workers, as well as education and training financing options available to them.

Among other things, the report found that:

• Many older unemployed workers lack the skills that are currently in demand.
  
• Many older job seekers are not well informed about the skills they will need to
  obtain a job or the best and most cost-effective way to obtain them.
  
• Many federal and state workforce programs are not targeted to the needs of adult and working learners.

The report's recommendations include:

• Government policy makers should insist on greater transparency from training providers and require them to report on the cost, duration, completion rates, and employment and earnings outcomes.
  
• Congress should reform financial aid programs to better assist older workers, including requiring educational institutions to improve financial aid counseling for adult learners from qualified, independent third parties.
  
• The tax system could be reformed to provide more financial support for older workers, such as expanding tax credits and deductions for education-related expenses such as transportation, childcare, and elder care.

Source: AARP Public Policy Institute News Release (February 25, 2015)

Singapore: Seniors Group Calls for Legislation Raising Re-Hiring Age to 67

According to news reports, the PAP Seniors Group (PAP.SG)—the seniors advocacy arm of the People's Action Party (PAP)—has submitted a position paper to Singapore's Ministry of Manpower, calling for legislation to increase the rehiring age for older workers from 65 to 67.

PAP.SG believes that while past legislative changes in the employment of older workers, coupled with the government grants and incentives, have helped older workers aged 55 to 64 years, he Government's plan to roll out incentives next year to coax more employers to raise the reemployement age to 67 is unlikely to be as effective as making it the law, especially in non-unionized sectors, where most workers are employed.

Sources: AsiaOne "PAP.SG calls for legislation to raise rehiring age for older workers" (November 18, 2014); Straits Times "Make it a law for firms to lift re-employment age from 65 to 67: PAP Seniors Group" (November 18, 2014)

New Zealand: Employers Need To Balance Retaining Older Workers with Developing New Workers

According to an article from Hays, New Zealand employers must balance the nation’s aging workforce with the continued development of new entrants to the labor market if they are to remain competitive long-term. According to Jason Walker, Managing Director of Hays in New Zealand:

“Those aged 65 and over in the workforce will increase in number, however by 2029 there will be fewer people in the labour force than not.

“Given the impending shrinking of the workforce, it makes sense to retain mature age workers for as long as possible.

“But we must not do so at the expense of training and developing new entrants to the labour market. If we look to the future, in order to maintain our competitive edge we need to ensure the country has a future pipeline of talent who have the skills and experience necessary to replace our ageing workforce when they do eventually retire. Otherwise there will be a skills vacuum that will take many years and a huge amount of investment to fill."

Thus, the balance that employers need to strike between retaining highly-valued, well educated and experienced older workers, and recruiting and developing the next generation of employees. However, the ultimate goal, according to Hays, is to focus on the recruitment, development and training of staff at all levels and of all ages.

Hays further explores the topic of the aging workforce in "Mind the Age Gap," published in the Hays Journal Issue 8.

Source: Hays Press Release (November 5, 2014)

Malta: Minister Addresses Ageist Culture in Workplace at Active Aging Conference

According to press reports, Helena Dalli, Malta's Minister for Social Dialogue, Consumer Affairs and Civil Liberties, has told a conference on active aging that Malta needs to change the present attitude by creating a culture change to combat ageism, since there are increasing reports of ageism in the workplace. She noted that, while the government can pass laws, changing the culture by highlighting this issue to employers will teach society that this mentality has to change.

Among other things, Dalli encouraged the elderly to maintain an active lifestyle, within their abilities, and encouraged employers to view older workers as assets with vast experience upon which to call.

Source: Malta Today "Ageist culture in the workplace needs to change--Dalli" (October 31, 2014)

Other information: Malta Independent "Active Ageing Strategy launched" (November 25, 2013); Parliamentary Secretariat for Rights of Persons with Disabilities and Active Ageing "Welcome Active Ageing

Taiwan: Survey Shows Older Workers Planning To Work after Retirement Age

1111 Job Bank has released a survey finding that the vast majority of Taiwan’s office workers intend to continue working after they retire. The main reasons given are financial concerns or to gain a sense of achievement. Specifically, 85.9% of those surveyed said they would still work in one form or another after retiring, with about 51% saying that they will look for part-time work, another 13% intending to start their own business, and 18% planning to devote their energy to investing and managing their wealth. An additional 3.8% said they would try to find a full-time job.

1111 Job Bank vice president Ho Chi-sheng recommended that the government should quicken its pace in establishing a comprehensive care system for senior citizens, especially in view of Taiwan’s rapidly aging population, and advised enterprises to improve their work conditions and lower hiring thresholds for middle-aged and elderly workers.

Source: Taipei Times "Taiwanese office workers hope to work in retirement" (October 29, 2014)

Canada: Survey Finds Most Canadians Not Saving Enough for Retirement

Most Canadians are concerned they have not saved enough to sustain them through retirement, according to findings from a Conference Board of Canada report. In "A Survey of Non-retirees and Retirees in Canada: Retirement Perspectives and Plans," 60% of those 55-64 years of age, and a little over 40% of those aged 65+ report that they have not put enough money aside, and these numbers are lower for women and those with lower levels of household income. The Board also has published a companion report—"An Employer's Perspective: Retirement Savings and Preparedness"—examining employers' views on the retirement preparedness of their employees, and retirement savings plans and practices among Canadian organizations.

The effect of this is that over one-third of Canadians say they don't know when they'll be able to retire. In addition, the report finds that the average planned age of retirement was 63.2 years of age. Women (83.5%) were more uncertain than men (69.8%) regarding their planned future retirement, and up to 19% of respondents say they will never retire.

Concern over inadequate retirement savings has already led a good number of Canadians to delay their retirement. More than one in five respondents have decided to retire later than their initial plan five years ago. Furthermore, a full 45.6 per cent of respondents say they plan to continue to work part-time or on a contract basis after their official retirement, and the percentage increases with age. About 51 per cent of those aged 45-64, and 60 per cent of those aged 65+ say they will continue working past their official retirement date.

In the report on the perspective of employers, the Board reports that more than 40% of employers believe their employees are too optimistic in their assessment of when they will be able to retire, and close to 50% feel their employees are unaware of how much savings are needed for retirement.

Source: Conference Board of Canada Press Release (October 27, 2014)

United Kingdom: Prince Charles's Group Issues Report on Older Workers and Unemployment

In the United Kingdom, the Prince’s Initiative for Mature Enterprise (PRIME) and Business In The Community, which are looking at unemployment among the over 50's, have, with the International Longevity Centre, released the first of three reports looking at the economic barriers facing the over 50s. "The missing million: illuminating the employment challenges of the over 50s" reports that, of the 3.3 million economically inactive people aged 50-64, approximately 1 million people have been made "involuntarily workless" (pushed out of their previous job as a result of "shocks," a combination of redundancy, ill health or early retirement), which has created a group of millions of over 50s are not working but would like to and are not receiving the help they need.

In addition, the report finds that helping people aged over 50 are helped back into employment does not mean that younger people are crowded out of the labor market, but rather could lead to a potential £88 billion boost to the UK GDP.

Two further reports are expected to be published following this paper on employment solutions and benefits of maintaining an older workforce.

Sources: International Longevity Centre Press Release (October 23, 2014); PRIIME News Release (October 23, 2014)

Switzerland: OECD Reports Calls for Greater Efforts To Help Older Workers Stay at Work

The OECD has issued a report finding that Switzerland should do more to help older people, especially women, work longer in order to meet the challenge of a rapidly aging population. According to "Working Better with Age in Switzerland," while Switzerland has one of the highest employment rates for older workers in the OECD (in 2012, 70.5% of Swiss aged 55-64 were in work), the rate is much lower for women (61.5%), particularly if they are non-graduates (49%). In addition, the report notes that, once older workers lose their jobs, it is often difficult for them to get back into the labor market: 59% of unemployed Swiss workers aged over 55 had been out of work for more than 12 months in 2012, up from 40% a decade ago and above the OECD average of 47%.

Accordingly, the OECD recommends that Switzerland (in order of priority):

• help women by promoting their employability, make it easier for them to balance work and family life throughout their careers and remove work disincentives in the tax system and the pension system;
• make training more attractive for low-skilled workers and encourage enterprises to keep training them until the end of their careers;
• encourage social partners and pension funds to reduce incentives for early retirement in their second pillar schemes;
• support the action of the Public Employment Service in helping older workers, particularly aged 60-64, find stable jobs;
• improve the targeting of social assistance budgets for the older unemployed to help them back into work;
• encourage social partners to link pay more to experience and performance than age;and
• combat age discrimination (which remains legal in Switzerland, and is quite common.

Source: OECD News Release (October 23, 2014)

New Zealand: Conference Addresses Employment of Older Women

New Zealand's National Advisory Council on the Employment of Women (NACEW) held a conference on "Employment of Older New Zealand Women" at which, among other things, results of research were presented, showing that there's a large number working low-paid and physically demanding shift work. In "The Employment of Older NZ Women", the study commissioned by NACEW, economist Paul Callister suggests that the rates of older women in the workforce, which have shot up from 2% of those aged 65 or more 20 years ago to 15% today, could top 30% in a further 20 years.

Combining the recent trends in education with the projected demographic change shows there is a large ‘bulge’ of mid-life women workers, most of whom are working full time and many of whom are well educated, who are moving towards traditional ages of retirement. Depending on their choices and opportunities in the labour market, in the short term this may lift the employment rates of older women. But in the longer term, this group will continue ageing and will move into age groups where employment rates are very low.

While presenting various data, comparing ages, education, region, and Maori, the paper does not make any specific recommendations. However it does suggest that relatively little is known about the employment of older women, and that one important issue for further research is the relative employment related earnings of older women and men.

At the conference, Traci Houpapa, NAECW chief executive, was quoted as saying that ageism is a major barrier to older women wanting to work: "Age discrimination can also have an impact, reducing the ability of older workers to change careers later in life if issues start to occur, therefore more flexible, sustainable employment is required to enable older workers to stay in the labour force."

According to another report, Minister for Women Louise Upston said the economy was strengthening but, as the employment market tightened, there would be increasing demand from employers for on-job training for staff who did not have formal qualifications.

Sources: TVNZ One News "Concerns raised for ageing female workers" (October 22, 2014); Stuff.co.nz "Working women 65 and older set to double" (October 22, 2014)

Survey Looks at "Generation 2.0" Gap between Younger and Older Employees in the Workplace, and Mentoring Needs

According to a survey conducted by Harris for Ricoh-USA, intergenerational tensions resonate in today's U.S. workplace as many younger workers question older colleagues' competence and many older workers question younger workers' commitment. Referring to this as "Generation 2.0," the survey found that:

• 69% of those surveyed say younger workers are frustrating when it comes to work ethic;
  
• 48% say the younger employees usually have to help older ones at their place of employment use technology; and
  
• when workers are asked to identify which generations make the best mentors, they generally choose their own generation. In fact, those 18-34 (27%) are three times as likely as those ages 35-44 (8%), 45-54 (4%), and 55-64 (5%) to cite Gen Y (also known as Millennials) as the best.

According to Terrie Campbell, Vice President, Strategic Marketing, Ricoh Americas Corporation, "although Generation Gap 2.0 doesn't pervade the culture like the original generation gap did, it's no less a real phenomenon."

"We recommend companies take a hard look at whether their business information is working for employees of every workstyle," said Campbell. "At the same time, companies should configure their mentorship and training programs with generational differences in mind. They need to ensure that older workers have a comfort level with using technology effectively and that younger workers develop the people skills that previous generations have valued. There's a lot for employees to learn from one another."

Source: Ricoh-USA News Release (October 21, 2014)

Related Source:

Germany: Court Rules that Older Workers May Be Given More Vacation Time than Younger Workers

Germany's Federal Labor Court has issued a ruling that allows an employer of older workers to give more vacation days annually than the younger ones, finding that this difference in treatment on grounds of age can, from the viewpoint of protection of older employees in accordance with discrimination law, be permitted. In this case, a shoe manufacturer, decided that work in its production operation was physically tiring, to allot two extra vacation days to employees after 58 years of age, to allow for longer recovery times than younger workers.

According to one report, a court spokesman said that this kind of differentiation would have to be decided on a case-by-case basis, as different types of work placed different strains on workers.

Sources: Federal Labor Court Press Release No. 57/14 (October 21, 2014); The Local "Older workers can have extra days off, court says" (October 21, 2014)

Research: Effect of Early Retirement and Part-time Employment on Participation Rates of Older Workers in Europe

The results of a study analyzing the variation in labor market withdrawal of older workers across 13 European countries over the period 1995-2008 has been published. In "Early retirement across Europe. Does non-standard employment increase participation of older workers?," Jim Been and Olaf Van Vliet sought "to contribute to existing macro-econometric studies by taking non-standard employment into account, by relating the empirical model more explicitly to optional value model theory on retirement decisions and by using a two-step IV-GMM estimator to deal with endogeneity issues."

Their analysis, published as Netspar Discussion Paper No. 10-2014-044 led Been and Van Vliet to the conclusion that part-time employment is negatively related to labor market withdrawal of older men. This relationship is less strong among women. In addition, they found that part-time employment at older ages does not decrease the average actual hours worked. Furthermore, the results show a positive relationship between unemployment among older workers and early retirement similar to previous studies.

As a wider implication, our results suggest that facilitating part-time work might contribute to higher labor market participation among older workers at the extensive margin. However, facilitating part-time employment could also induce a reduction in working hours among persons who would otherwise have remained working in full-time employment. Our analysis suggests that increases in part-time employment did not have negative effects on the labor supply at the intensive margin across countries. For men, the results even suggest clear positive effects. This indicates that part-time work schemes may actually increase the labor supply at both the extensive and the intensive margin at older ages.

Source: Social Science Research Network Abstract (October 15, 2014)

United Kingdom: Survey Finds Gen Y Employees with Negative Attitude Toward Older Workers, Flextime

According to research conducted for the United Kingdom law firm Doyle Clayton, Generation Y employees have the most negative attitudes towards older employees and part-time and flexible workers. In addition, "Age Before Beauty? The Challenges Facing Britain's Managers in Overcoming Age and Gender Discrimination in the Workplace" reports that, according to their employees, micro businesses are Britain’s least discriminatory workplaces, and mid-sized businesses are where you are most likely to experience discrimination at work.

Among the key findings from "Age Before Beauty?" are:

• in micro businesses (1-9 employees), 96% of employees feel that age discrimination has never been an issue;
• in medium sized (50 – 249) and larger businesses, over 20% of employees had witnessed discrimination on grounds of age, whereas in micro businesses virtually no employee interviewed had witnessed it;
• 20% of employees at medium sized and large businesses view colleagues who work flexibly as less committed, whereas employees at micro businesses were consistently more positive; and
• Generation Y have the most discriminatory attitude toward flexible working and older workers, with 27.4% of those aged 25 to 34 seeing fellow employee working part-time as less committed, 31.1% seeing those working from home two or more days a week as less committed, and 18.3% (more than twice any other age group) seeing workers over 60 as less valuable.

Source: Doyle Clayton News (September 2, 2014)

Aging Workforce Issues Come To the Comics Page

I don't know how long this story line will go on, but starting with the July 28, 2014, strip "Judge Parker," older workers are being looked at as a means of building new business with lower labor costs.

In this instance, senior citizens are being targeted for their decreased need for health care and pensions. It will be interesting to see what transpires, but the concept that the seniors that need work might be the ones without health care and pensions seems to be missing.

Source: Washington Post Judge Parker (July 28, 2014)

United Kingdom: Government Appoints Business Champion for Older Workers

Dr. Ros Altmann CBE has been appointed by the United Kingdom government as its new Business Champion for Older Workers. A former director-general of Saga and independent expert on later life issues, Dr. Altmann is tasked with making the case for older workers within the business community and challenging outdated perceptions. Her appointment follows the government’s publication of "Fuller Working Lives – A Framework For Action," which set out the benefits to individuals, business and the economy as a whole of people aged over 50 staying in work.

In making the appointment, Minister of Work and Pensions Steve Webb MP, said that he "wanted a powerful voice; someone respected amongst the business community, with a track record of speaking up for consumer rights without fear or favour. In Dr Ros Altmann that’s exactly what we have." Dr. Altmann said:

I am really proud to be taking on this new role and look forward to championing over 50s in the workplace. This fast-growing section of society has so much experience and talent to offer and could play a vital role in future growth. Everyone can benefit from ensuring their skills do not go to waste. I also look forward to challenging some of the outdated and downright inaccurate perceptions of later life workers who still have so much to offer.

Source: United Kingdom Department of Work and Pensions Press Release (July 14, 2014)

Midwestern United States: Immigration Helping To Overcome Population Loss and Aging Workforce

The Chicago Council on Global Affairs has issued a report finding that immigration is a demographic lifeline for metropolitan areas throughout the 12-state Midwest region, helping to overcome population decline and an aging workforce. According to "Growing the Heartland: How Immigrants Offset Population Decline and an Aging Workforce in
Midwest Metropolitan Areas," authored by Rob Paral, the number of native-born persons aged 35 to 44—in their prime working and tax-paying years—fell by 1.4 million from 2000 to 2010 in the Midwest, while the percent of Midwesterners who are in their late working years or early retirement years is on the upswing. On the other hand, while the number of native-born persons in Midwestern metro areas grew by only 3.3% between 2000 and 2010, the number of immigrants grew by 27%, so that immigration now accounts for 38.4% of all metro area growth in the Midwest.

“The demographics reveal that the immigrant population is here and important to the region’s growth,” said Juliana Kerr, who directs The Chicago Council’s immigration work. “Policymakers now should focus on developing effective policies to seamlessly integrate immigrants and leverage their economic potential.”

Source: The Chicago Council on Global Affairs Press Release (June 24, 2014)

Research: Pension Workshop Includes Presentations on Interplay of Continued Work and Pension Claims

The Netspar International Pension Workshop hosted by Venice International University in June 2014, heard presentations on a range of topics on the common themes of retirement, pensions and aging. Among other things, presentations included:

• Matthew Rutledge (Center for Retirement Research at Boston College) "Point of no return: How do financial resources affect the timing of retirement after a job separation?," with follow-up presentation by discussant Mauro Mastrogiacomo
• April Wu (Center for Retirement Research at Boston College) "How do subjective longevity expectations influence retirement plans?" with follow-up presentation by discussant: Susan Thorp
• Nadia Karamcheva (Urban Institute)
  "Does household debt influence the labor supply and benefit claiming decisions of older Americans?" with follow-up presentation by discussant: Giacomo Pasini
• Ricky Kanabar (University of York) "To defer or not defer? State pension in a lifecycle model" with follow-up presentation by discussant: Markus Knell

Source: Netspar News Release (June 23, 2014)

Singapore: Government Announces Plan for Incentives to Employers Implementing Flexible Work for Mature Workers

At a speech on "Effective Workplaces: Creating a Flexible, Inclusive, Safe and Healthy Workplace" delivered at the Age Management Seminar, Dr. Amy Khor, Senior Minister of State for Health and Manpower, announced several enhancements that the Singapore Government was going to make to WorkPro to help employers better manage mature workers, especially with respect to flexible work arrangements (FWAs). The most significant enhancement is to:

provide employers with a $10,000 incentive to pilot new FWAs, and an additional $10,000 to support them in implementing the FWAs company-wide. With the enhancement, employers can receive a total funding of $40,000 for implementing FWAs, including the reimbursement of expenses incurred during the pilot and company-wide implementation.

In addition, expanding on the $40,000 a year employers can currently receive if they have 30% of their workers using FWAs, there will also be a cash incentive of up to $25,000 a year for employers who have 20% of workers benefitting from FWAs.

Khor also announced that the goverment would introduce a Workplace Health Promotion (WHP) Facilitator’s course, to help arm employers with the necessary knowledge and tools to plan, design and evaluate workplace health programs for their workers. "This will ensure that all employers who tap on the Age Management Grant have the capability to actively promote healthy living among their employees, especially the older ones."

In order "for companies to understand the value that mature workers bring to their business, and adopt a nondiscriminatory mindset when it comes to hiring and managing workers," Khor said that the Tripartite Committee on Employability of Older Workers is launching an advertising campaign—entitled "Tap into a Wealth of Experience"—to highlight the value and experience that mature workers can bring to the workplace.

Sources: Ministry of Manpower Speeches (June 18, 2014); The Straits Times "$10,000 grant for bosses who try flexi-work schemes" (June 19, 2014)

Average Age of Disability Claims Rises to Above 50

The Council for Disability Awareness reports that, in 2013, the average claimant age exceeded 50 for the first time ever. Claims for those age 50 and older, mostly driven by claimants over age 60, have been consistently increasing as a percentage of the total, reflecting the aging of America's working population. According to its report, "2014 Long Term Disability Claims Review," 59% of the new claims approved during 2013 were for individuals age 50 or older. The Council also cites an aging workforce as one of the factors most cited by reporting companies as likely to impact future claim incidence.

In an article about the report for Bloomberg News, Craig Giammona writes that "Prudential Financial Inc. (PRU) and Hartford Financial Services Group Inc. (HIG) are among insurers that have raised prices for the coverage after being caught off guard by higher-than-expected claims costs." In addition, he quotes Council President Barry Lundquist as saying: "On average, older people have higher wages and it’s harder for them to get back to work.When you think about the baby boomers and how old they are now, they have a much higher chance of becoming disabled -- maybe a four or five times higher chance in a given year than someone that’s in their twenties or thirties.…When you think about the baby boomers and how old they are now, they have a much higher chance of becoming disabled—maybe a four or five times higher chance in a given year than someone that’s in their twenties or thirties."

Sources: Council for Disability Awareness News Release (June 17, 2014); Bloomberg News "Aging Workers Push Disability Costs Higher for Insurers" (June 17, 2014)