Thriving Economy Drives Senate Efforts To Retain Older Workers

April 14, 2000 (PLANSPONSOR.com) - Increasing demand for highly skilled workers is driving efforts by Congress to keep older Americans at work. With February unemployment figures hovering at a low 4.1 percent, companies find it difficult and costly to replace experienced workers lost to retirement.

Pension laws eyed

The Senate Special Committee on Aging Committee recently held hearings to explore work incentives like equal access to technology training, phased retirement, revising pension laws that penalize older workers, and combating career stagnation.

Productive older workers also are seen as a way to broaden the taxpayer base and counteract the expected burden on entitlement programs. By the time most baby boomers retire, the ratio of workers to retirees will have dwindled from seven to one in the 1950s to less than three to one in 2030.

Meanwhile, American Association of Retired Persons (AARP) polls reveal only 13 percent of Americans currently aged over 64 still work. Eighty percent of the 76 million-strong baby boomer generation would like to work at least part time after age 65.

AARP weighs in

The AARP recommended phased retirement programs to the Committee; early efforts in Sweden are showing great success. Additionally, the 34-million member group strongly urged review of cash balance pension plans that reduce or freeze accruals in older workers’ accounts.

Already, Congress has repealed the Social Security earnings limit, which had reduced benefits for those still working after age 65. But that’s only a beginning.

Action suggested

“New Opportunities for Older Workers,” a report submitted to the Senate Aging Committee by the nonprofit, nonpartisan 200-member Committee for Economic Development recommended further action:

  • Urge businesses to pursue actuarial neutrality in their pension plans, so that the lifetime value of benefits does not decline after the plan’s retirement eligibility age;
  • Urge policymakers to revisit provisions in the Employee Retirement Income Security Act (ERISA) that limit employers’ ability to offer flexible work arrangements to older workers;
  • Call for employers and government to step up their efforts to educate workers in the area of financial planning;
  • Replace the view that training older employees is a bad investment.

“More customized retirement arrangements and flexible scheduling will be the norm,” declares Senator Charles Grassley, R-Iowa, Chairman of the Senate Special Committee on Aging. “Our nation’s financial bread and butter depends on it.”

– Ann Bidou       editors@plansponsor.com

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