Phased Retirement Largely Ignored Despite Flood of Retirees
With 10,000 baby boomers retiring daily, it would seem that flexible retirement would be a staple benefit within the workforce. It’s not.
The Zeeland, Michigan-based office furniture company had a significant number of baby boomers and saw the potential for its talent to walk out the door at the same time.
“We needed to create a process that benefited both sides of the equation,” said Tony Cortese, Herman Miller’s senior vice president of people services.
In response, it rolled out a flexible retirement program. Workers who are 60 or older with at least five years of service under their belts are eligible. The flexible retirement participant works with a team leader to schedule a reduction of hours that lasts anywhere from six months to two years. During that time, participants transfer what they know about their job to younger workers and then retire when their term is over.
Right now, more than 100 employees are doing flexible retirement, Cortese said. Before the program was implemented, employees could give two weeks’ notice before retiring but it didn’t give team leaders enough time to plan.
With 10,000 baby boomers retiring daily, it would seem that flexible retirement would be a staple benefit within the workforce. It’s not, said Catherine Collinson, president at Transamerica Center for Retirement Studies.
In fact, Transamerica found that nearly two-thirds of employers erroneously think they offer programs and tools that are “aging friendly” like shifting to part time from full time or taking less stressful positions within the company.
The “17th Annual Transamerica Retirement Survey” found that only 31 percent of companies let their workers shift to part-time and only 27 percent let workers move to less stressful positions.
But 72 percent of employers said they believe their employees will stay on the job past age 65, so why not create a benefit similar to Herman Miller? According to the Society for Human Resource Management, only 5 percent of companies had a formal phased retirement program in 2016, and less than 1 percent planned to offer it within the next year.
Putting a formalized phased retirement plan in place has been on a lot of companies’ to-do lists, but has never been a top priority, said Tim Driver, founder and CEO at RetirementJobs.com.
Collinson and Driver said anecdotally that employers may be worried about age discrimination, compliance or other legal issues that may arise as a result of a flexible retirement program.
A recent study by the U.S. Government Accountability Office interviewed a number of employers with phased retirement programs. Each company reported that they worked through legal concerns and found the program helped ease workforce planning issues.
Cortese said flexible retirement is explained alongside other benefits available to all workers and that it is up to employees to tell team leaders whether they want to participate.
“We aren’t tapping them on the shoulder,” Cortese said. “It is something they are asking us about.”
Patty Kujawa is a writer in the Milwaukee area. Comment below or email firstname.lastname@example.org.