A new report penned by Catherin Collinson, CEO and president of Transamerica Institute and its Transamerica Center for Retirement Studies, delves into the sensitive topic of managing the average age of a workforce.
At the top of her analysis, Collinson notes that the data underlying the 17th Annual Transamerica Retirement Survey has been collected since 1998, when Transamerica Center for Retirement Studies first kicked off its recurring national survey of U.S. business employers and workers regarding their attitudes toward retirement. Each update to the research sets quotas for large and small companies and results are statistically weighted as needed.
From a high level, the findings show both a positive and negative outlook for U.S. retirement plans. While the quality of plans has clearly improved since the survey effort began nearly two decades ago, overall, nearly seven in 10 plan sponsors believe that most employees at their company could work until age 65 and still not save enough to meet their retirement needs.
“People are living longer than at any other time in history, which is putting a strain on Social Security and intensifying shortfalls in personal savings,” Collinson warns. “It’s hardly surprising that many workers envision working past age 65 and some do not plan to retire at all.”
The data shows fully 72% of employers agree with the statement, “Many employees at my company expect to work past age 65 or do not plan to retire,” including 24% who “strongly agree” and 48% who “somewhat agree.”
While four out of five employers say they support employees working past age 65, they also understand that an aging workforce has its drawbacks, some of them severe, for example from the perspective of health benefits expenses and higher average wages. Collinson suggests some of the willingness among employers to see employees work past the traditional retirement age comes from the fact that retirees are transiting away from work in a variety of ways.
“Almost half of employers say that many of their employees envision a phased transition that involves reducing hours and/or working in a different capacity,” she explains. “Forty-four percent of employers believe that many workers envision working as long as possible in their current or similar position until they cannot work anymore. Only 35% of employers believe that many employees envision a planned stop, i.e., when they reach a certain age or savings amount.”
NEXT: Older workers and employer perception
The Transamerica research goes on to warn that there are some seeming discrepancies between how employees and employers view this concept of phased retirement.
“Despite employers’ recognition that many of their employees envision a flexible or phased transition into retirement, few have actual programs in place to support them,” Collinson observes. “Only 39% of employers offer flexible schedules. Even fewer enable their employees to shift from full-time to part-time or take on positions that are less stressful or demanding. Moreover, employers are missing an opportunity to ensure smoother transitions when their employees do retire.”
In the end, only 27% of employers today encourage employees to participate in succession planning, training and mentoring, Transamerica finds. Given all these findings, Collinson says it is only natural that concerns about ageism are common in today’s society, especially with so many workers planning to work past age 65 and delay full retirement. As a result many employers are making a good faith effort to establish reasonable policies in this area.
As the data shows, when asked to “select all that apply” from a list of 12 potential perceptions of workers age 50 and over, the vast majority (85%) of employers cited one or more positive perceptions. Many employers indicated that older workers “bring more knowledge, wisdom and life experience, are more responsible, reliable and dependable, and are a valuable resource for training and mentoring. In contrast, a smaller majority of employers (59%) also cited some negative perceptions, including “higher healthcare costs, higher wages and salaries, and higher disability costs.”
The full analysis is available for download here.
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