Re­tire­ment, de­ferred: The new re­al­ity

The Denver Post - - BUSINESS - By Jena Mcgre­gor

Life af­ter 65 is start­ing to look a lot more like life at …. 64. The per­cent­age of Amer­i­cans work­ing past the tra­di­tional re­tire­ment age hit new highs in the most re­cent jobs num­bers, ac­cord­ing to re­cent re­ports, with 19 per­cent of those 65 and older work­ing at least part­time. And it’s only ex­pected to in­crease: The over-65 set is ex­pected to be the fastest-grow­ing de­mo­graphic in the work­place by 2024, ac­cord­ing to the U.S. Bureau of La­bor Sta­tis­tics.

So what are com­pa­nies do­ing to re­spond? A few have re­designed man­u­fac­tur­ing plants to adapt. Some lucky em­ploy­ees are get­ting higher 401(k) matches to help them save. More re­cently, many com­pa­nies have launched fi­nan­cial wellness pro­grams to help em­ploy­ees of all ages make sure they’re bet­ter pre­pared to re­tire on time.

One might as­sume “phased re­tire­ment” pro­grams, a ben­e­fit be­gun 15 years ago or so to help em­ploy­ees grad­u­ally step away from their jobs, would be hot­ter than ever, of­fered to give work­ers a way to keep work­ing part-time or in al­ter­nate ar­range­ments while help­ing com­pa­nies hold on to work­ers with valu­able skills.

But the num­bers don’t show that. Ac­cord­ing to Worl­dat­work, a non­profit hu­man re­sources as­so­ci­a­tion, the per­cent­age of com­pa­nies that of­fer the ben­e­fit — 29 per­cent — dipped slightly in 2017, and growth has stalled over the past six years. The So­ci­ety of Hu­man Re­sources Man­age­ment, whose sur­veys in­clude more small and mid-size com­pa­nies, found that the use of for­mal phased re­tire­ment pro­grams is just six per­cent while in­for­mal use of the idea has ticked up to just 13 per­cent.

“We haven’t seen a flood of large em­ploy­ers say­ing we want to have phased re­tire­ment pro­grams lock stock and bar­rel,” said Rose­lyn Fein­sod, a se­nior part­ner in Aon He­witt’s re­tire­ment prac­tice. “We just haven’t seen a huge preva­lence.”

How­ever, that doesn’t nec­es­sar­ily mean em­ploy­ers are be­ing more stingy about a more grad­ual re­tire­ment. Hu­man re­sources ex­perts say that in­stead, com­pa­nies are of­fer­ing the op­tion to near-re­tirees un­der the broader um­brella of flex­i­ble work ar­range­ments — a devel­op­ment that could help older work­ers in some ways, but pos­si­bly hurt if they work for or­ga­ni­za­tions where flex­i­bil­ity isn’t as highly val­ued.

“If there’s any­thing em­ploy­ers want, it’s a com­mit­ted em­ployee,” said Jac­que­lyn James, co-di­rec­tor of the Cen­ter on Ag­ing & Work at Bos­ton Col­lege. “They don’t want a sign they’re one foot in and one out the door.”

Phased re­tire­ment, hu­man re­sources ex­perts say, emerged in the early 2000s as com­pa­nies grew con­cerned about a Baby Boomer ex­o­dus. The pro­grams saw an uptick in pop­u­lar­ity around the mid­dle of that decade af­ter reg­u­la­tory changes helped ad­dress ques­tions about how tra­di­tional pen­sion ben­e­fits would be paid out, said Lenny San­i­cola, a se­nior prac­tice leader at Worl­dat­work, but then the ben­e­fit fell in pop­u­lar­ity dur­ing the Great Re­ces­sion, as so many work­ers felt they could no longer re­tire.

The pre­vail­ing trend now is to in­clude the op­tion in the part­time, job shar­ing and other flex­i­ble ar­range­ments that the em­ployer of­fers to all work­ers

One up­side to this trend for older work­ers, James said, is that em­ploy­ees won’t have to be as clear about their plans with their boss. “The phased re­tire­ment has a lot of com­pli­ca­tions to it,” she said. “It means you are sig­nal­ing to the or­ga­ni­za­tion that you’re re­tir­ing,” even years out, when more pro­mo­tions or big as­sign­ments could be in store. An­other is­sue with more for­mal pro­grams, she said, is that they of­ten re­quire em­ploy­ees to set a re­tire­ment dates.

Still, she points out that peo­ple who work for bosses who frown upon flex­i­ble work ar­range­ments more broadly could have a tougher time. “The down­side will be if the or­ga­ni­za­tion has poli­cies on the books but doesn’t re­ally sup­port them,” she said.

Re­nee Mcgowan, who leads Mer­cer’s global re­tire­ment sav­ings and fi­nan­cial wellness busi­ness, said there’s also “ab­so­lutely” a risk that such ap­proaches to flex­i­bil­ity won’t help older work­ers if em­ploy­ers don’t com­mu­ni­cate them well, and they seem more ori­ented to­ward, say, par­ents of young chil­dren. “We’re go­ing to need a far more overt con­ver­sa­tion around em­ploy­ers and em­ploy­ees about their re­tire­ment plans,” she said.

In ad­di­tion to the shift in flex­i­bil­ity pro­grams for older work­ers, Mcgowan and oth­ers said the recog­ni­tion that peo­ple aren’t fi­nan­cially ready to re­tire has made “fi­nan­cial well-be­ing” pro­grams a pop­u­lar new cor­po­rate ben­e­fit. Em­ploy­ers, she said, are “re­al­iz­ing that ‘I can’t ex­pect my em­ploy­ees will want or be able to re­tire at 65. How do I help ?’ That’s been a huge im­pe­tus for the fi­nan­cial wellness pro­grams,” she said.

The ben­e­fit, which can in­clude fi­nan­cial ed­u­ca­tion, ac­tual coach­ing and ad­vice on ev­ery­thing from col­lege sav­ings to when em­ploy­ees can af­ford to re­tire, have grown in pop­u­lar­ity in re­cent years but “have be­come re­ally hot this year,” Mcgowan said.

The most so­phis­ti­cated com­pa­nies, Mcgowan said, are rec­og­niz­ing this is a chal­lenge that’s here to stay, and plan­ning for a fu­ture where the skills and ca­reers of over-65 work­ers are very much part of the work­force.

“There is this large shift from a world where em­ploy­ers re­ally wanted peo­ple to re­tire at 65,” she said, “to one where they re­al­ize that may not be a re­al­ity, ei­ther on the part of em­ploy­ers or em­ploy­ees.”

“We haven’t seen a flood of large em­ploy­ers say­ing we want to have phased re­tire­ment pro­grams lock stock and bar­rel.we just haven’t seen a huge preva­lence.” Rose­lyn Fein­sod, a se­nior part­ner in Aon He­witt’s re­tire­ment prac­tice

Tracy A. Wood­ward, Wash­ing­ton Post file

Job seek­ers 55 and older ar­rive at the Dis­trict of Co­lum­bia's De­part­ment of Em­ploy­ment head­quar­ters in Wash­ing­ton, D.C., in 2012.

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