Employers know this is a looming issue. According to a Willis Towers Watson poll, 83% of large employers report that significant numbers of their employees are approaching “retirement age.” Fifty-four percent of these companies also acknowledge that the loss of talent will be more significant than other labor market risks. So why not revisit the 135-year-old idea of retirement starting between the ages of 62 to 65 and get with the program? According to Willis Towers Watson, only one in 10 large corporations currently offers a formal phased retirement program allowing workers to cut back on hours before they permanently cut the cord.
The American Transmission Company is an inspiring example for us all, and a model for other companies to follow. Having the unusual perspective that comes from being a relatively new company without retirees, the firm has brought modernity into the discussion, recognizing that what is best for the employees is best for the future of the company. Some employees will retire early and some will retire later—but all are empowered to do what is best for themselves.
There are other examples, some cited in a 2017 report by the Government Accountability Office:
• One program allows workers who are at least 55 years old with 10 years of service to cut their hours by 20% with a 20% cut in pay. They can keep their health insurance and pension accrual benefits.
• Another program allows employees age 60 and older with five years of service to reduce their hours by 20% to 50%, or even more if they're willing to lose their health insurance benefit.
• Another employer allows workers age 55 and older with seven years of service to negotiate their own “glide path” to retirement, ramping down from full time to full retirement while retaining benefits.
• Another company allows any employee to switch to less stressful or complex duties or phase to part-time work, retaining health insurance if they work at least 25 hours a week.
It should come as no surprise that the employers who offered phased retirements told the GAO that the plans are “good for business.” The American Transmission Company’s slogan is, “Keeping the lights on, businesses running and communities strong.” And like ATC’s slogan, phased retirement keeps the lights on cognitively, aids in intellectual transfer, and keeps businesses running smoothly on the transfer of knowledge and experience. This all adds up to a stronger and healthier community … because everyone is well-served in the proposition.
Mitch Anthony is the creator of Life-Centered Planning, the author of 12 books for advisors, and the co-founder of ROLadvisor.com and LifeCenteredPlanners.com.