In a report to the U.S. Senate Special Committee on Aging, the Government Accountability Office (GAO) recommends that employers adopt phased retirement programs, so that they will not suddenly lose the knowledge and experience of Baby Boomers. However, only 15% of workers between the ages of 61 and 66 are semi-retired, according to the GAO.
The GAO also reviewed a 2016 Society for Human Resource Management (SHRM) survey, that found only 5% of its membership base offered a formal phased retirement program. However, 11% offered an informal phased retirement program. Among large employers, those with 2,500 to 9,999 workers, 16% offered a formal phased retirement program.
“Nine of 16 experts GAO interviewed explained that industries with skilled workers or labor shortages are motivated to offer phased retirement because their workers are hard to replace,” GAO says. Consulting, education, government, utilities and high-tech are among the industries most likely to offer phased retirement, according to the GAO. “While not all researchers agree, it has been suggested by some that as the population ages and the number of Baby Boomers leaving the labor force increases, there could be a loss of economic productivity. The availability of phased retirement, by extending the labor force participation, has the potential to provide options that would be beneficial both to the older workers and the overall economy.”
Reasons why employers do not offer phased retirement programs include the belief that older workers are less productive and create more expensive health care costs, according to the GAO. Other employers are concerned about regulatory complexities involving federal tax and age discrimination laws.
Those that do offer phased retirement said they did so to enable knowledge transfer and to manage their workforce more capably.
The full GAO report may be downloaded from here.
« A Little Friday File Fun