Benefits March 15, 2007

Nearly 20% of Workers Plan to Stay on After Retirement

March 15, 2007 (PLANSPONSOR.com) - Eighteen percent of small businesses say their older workers plan to keep working after retirement and 56% say they see the advantage of letting them stay, according to a recent survey.
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The survey by the National Association of Professional Employer Organizations (NAPEO) of 390 companies wanted to see how these small companies are gearing up for the wave of a baby boomer retirement. The organization represents firms that handle human resources chores for small and medium-sized businesses, from payroll to administering 401(k) retirement investment plans to helping companies plan for an aging work force.

The organization asserts that small businesses – which have seen an increase of 5% over the last five years of workers between 60 and 64 – may have a more difficult time dealing with a surge of retirees who want to keep working because they have limited resources.

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“Either way, these older employees represent both an opportunity, thanks to their valuable experience, and a huge challenge, because small businesses have to start getting ready now for the graying work force, “ said Milan Yager, executive vice president of NAPEO, in a press release on the survey.

Other results of the survey include:

  • Of the nearly 20% of companies who said their workers would stay on after retirement, 37% said their employees were staying on because they liked it and 34% said they liked the income.
  • Nearly three-quarters of companies said they offered a 401(k) plan and 53% contribute to it
  • Only 8% of companies said they were likely to lose workers to early retirement, compared to 40% who said they wouldn’t and more than half who said they didn’t know.
  • 56% said they see the advantage of retaining older workers after retirement; 12% said they didn’t; and 32% had no opinion.
  • Only six of the companies surveyed said they offer a phased retirement, in which workers can reduce their hours and start drawing on their pensions; 63% do not offer the plans and 36% were not familiar with them.
  • Almost three-quarters of companies said they valued older workers because of their experience, 10% said it would be less expensive than training new employees; 9% say these workers could serve as mentors and trainers; and 7% said they provide continuity.

To view the full survey go here .

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