Senate Hears About the New Working Retirement

The U.S. Senate Special Committee on Aging held a hearing titled “Work in Retirement: Career Reinventions and the New Retirement Workscape.”

Susan Nordman, owner of Erda, a small artisan manufacturing company and the maker of Erda Handbags, told the Senate Special Committee on Aging that when she is asked “do older workers cost more?” the answer is “they cost different.” 

During a hearing titled “Work in Retirement: Career Reinventions and the New Retirement Workscape,” she explained that when updating equipment, she had to take into consideration the physical limitations of an older body since she has an older workforce. The cost of the equipment she purchased was magnitudes higher than less automated sewing machines, but the workforce is less physically stressed.  In addition, the improvement in time and quality goes directly to the bottom line. The return on the investment in the new machines will be less than three years.  

“The age of my employees has posed the need for human body considerations and adjustment, but it also represents a wealth of talent and knowledge,” she said. “Preserving critical knowledge before it leaves is vital to the longevity of any business.”  She noted that the skills her workers need require hands-on learning, and she pairs new employees with older employees to learn those skills.

James C. Godwin, Jr., vice president of human resources at Bon Secours Virginia Health System, said 35% of its employees are 50 or older and 11% are in their 60s. There are 126 employees in their 70s and 12 in their 80s. He mentioned Nettie Coleman, who turns 81 this year, and has worked with Bon Secours Virginia for 58 years so far. She tried retirement for a few months, but her respect and passion for her work drew her back. After nearly six decades, Nettie still works part-time in pre-placement, conducting physicals, drawing blood and helping new employees.

Bon Secours Virginia’s oldest employee is Virginia Abbott, who is 89 and celebrates 29 years of service this year, meaning she was hired by Bon Secours Virginia at the age of 60. Godwin said the health system also has many employees launching “encore careers.” A former high school administrator and a professional firefighter recently graduated from Bon Secours Memorial College of Nursing. Both men are in their 50s and are enjoying second careers in the health system.

NEXT: Adjusting the workplace and benefits for older workers.

Bon Secours Virginia is committed to a culture that attracts, values, retains and celebrates workers age 50 and older. AARP ranked it a “Best Employer for Workers over 50” since 2003.

To accommodate an older workforce, the health system realizes that working in a hospital setting can be hard on nurses due to the physical challenges, Godwin said. It has mobility-lift teams to help older workers with the regular turning of bed-bound patients.

In addition, by offering initiatives such as phased retirement, flexible work schedules and intergenerational programming, Bon Secours Virginia has been successful in retaining its older workers. There are about 100 Virginia employees who receive both a retirement check and a pay check. Also, anyone working 16 hours or more for Bon Secours Virginia is eligible for its benefits. 

Employees’ grandchildren are eligible to attend its on-site Family Care Centers. Older workers utilize its Employee Wellness Services to maintain healthy and active lifestyles. Life-long education and training help Bon Secours Virginia attract and keep older workers; it offers classes to encourage engagement, to facilitate job growth and to retrain for lateral moves.

Godwin said employers committed to a culture of aging must proactively address reasons older workers leave. “We’ve found that flexibility addresses nearly all of them. Preventing attrition through flexibility involves creative thinking and a willingness to try new approaches,” he said.

Coming up: Public policy suggestions.

Kerry Hannon, a contributing editor at Forbes, cited three financial reasons for workers to stay in the workforce as long as they can:

  • The more earning years they can build savings in a defined contribution plan or an individual retirement account (IRA), the better off financially they will be in retirement. Monthly Social Security benefits also grow the longer one works (until age 70).
  • The longer one works, the longer he or she can delay tapping into retirement funds, which can continue to grow.
  • Working can provide income to pay for health insurance until workers are eligible for Medicare at age 65, and the employer may provide health insurance.

While all witnesses agreed that some older workers want to stay employed for non-financial reasons, such as to stay engaged and remain active, Sara E. Rix, PhD, a consultant at Work and Aging, said financial factors are likely to influence work and retirement decisions even more in the future, as growing numbers of workers reach retirement age with no promised lifetime pension benefits and savings and investments that are inadequate to maintain pre-retirement living standards, pay out-of-pocket health expenses, and cover long-term care needs.

She suggested certain public policy initiatives that would encourage and help employees work longer, noting that there may be pluses and minuses for each:

  • Raising the early and/or full ages of eligibility for Social Security benefits would likely keep many more older Americans in the labor force because they could not afford to leave if their benefits were reduced even more than they are at present, Rix said. However, such increases would impose considerable financial hardship on the sick and disabled, on the unemployed, and on caregivers unless adequate social safety net programs are in place to protect them, and they are not there now;
  • Eliminating some of the impediments employers face in providing formal phased retirement programs might benefit some workers, although care would have to be taken to ensure that other worker protections are not undermined in the process;
  • Enhancing the attractiveness of part-time and contingent work through, for example, pro-rated benefits;
  • Eliminating the Social Security earnings test for workers below the full benefit eligibility age could encourage greater work effort on the part of early beneficiaries, although it might also prompt workers to opt for reduced benefits earlier than otherwise;
  • Offering tax or other incentives to employers to hire and retain older workers;
  • Requiring that employers provide paid family leave programs should make it easier for middle-age and older workers with caregiving responsibilities, among others, to combine those responsibilities with paid employment;
  • Expanding the Age Discrimination in Employment Act’s (ADEA’s) jurisdictional threshold to businesses with 15 or more employees, rather than the current 20-plus; and
  • Promoting older worker skills development.