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Easing into retirement
by
Paula C. Squires
Virginia Business
February
2005
As
America’s baby boomers near retirement age, a
majority of them expect to continue working. Some people
need the money; others want the outside socialization.
And some workers want the best of both worlds: reduced
hours and compensation over a gradual period of time,
allowing them to ease into retirement rather than have
careers suddenly end.
In response, some companies are offering “phased
in” retirement — an arrangement that enables
workers to cut back on hours and duties before taking
full retirement. The trend is gaining momentum, say
human resources consultants, because of demographic
shifts reshaping the U.S. labor force.
Namely, there’s a growing number of workers 55
years and older staying in the work force, and a slower
expanding pool of younger workers coming along to replace
boomers once they leave.
“If you’re not paying attention to it now,
you’re going to feel it in the years to come.
There’s going to be a huge skills gap,”
says Jen Jorgensen, a spokeswoman with the Society of
Human Resource Management in Alexandria, the world’s
largest trade group of human resource professionals.
By allowing boomers to gradually transition into retirement,
companies give younger workers more time to gain skills
and experience, thereby avoiding a drain of corporate
knowledge.
While younger workers may be more tech savvy, older
workers with specialized skills can be hard to replace.
At Bon Secours Richmond Health System, which runs three
hospitals, about 100 of the company’s 5,000 workers
are enrolled in a phased retirement program. Despite
the advantages for both employee and employer, some
pension plans restrict employees from receiving pension
distributions while still working — a restriction
new proposed Internal Revenue Service regulations would
change. Some firms find it easier to hire retirees for
part-time or temporary work. At Bon Secours, a worker
must have five years of service to be eligible for phased
in retirement; other companies require 10 years.
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