(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Mark Miller
CHICAGO Aug 14 Gwendolyn Ross will turn 66 in
November, but she isn't ready to retire. A deputy comptroller
for the U.S. Coast Guard in Miami Beach, Florida, she hopes to
work until she's 70 - but she would like to cut back her hours.
"I have some health issues that require a lot of visits to
the doctor, and I'd love to have more time to visit my family in
Michigan," she says. At the same time, she needs to keep working
to prepare for retirement. "As I get closer to it, I realize I'm
not as financially ready as I thought I would be when I was
younger. The time went by really quickly."
Ross is a great candidate for a new federal government
program that will allow workers to opt for a phased retirement.
Participants in the program, which launches this fall, will be
able to work half-time while collecting half their pensions
after they reach the eligible retirement age.
For the government, the program is expected to be a money
saver. The Congressional Budget Office estimated recently that
1,000 employees might take advantage of phased retirement
annually, and would continue work for three years. That would
cut required contributions to the government's pension system by
$427 million from 2013 to 2022, and boost worker contributions
by $24 million.
But phased retirement also will help the government retain
talent and expertise at a time when the "brain drain" from an
aging workforce is a major concern. About 600,000 people, or 31
percent of the federal civilian workforce, will be eligible for
retirement by September 2017, according to the U.S. Government
Accountability Office. Phased retirees will be required to spend
at least 20 percent of their time mentoring younger employees.
"It can help people who want to phase out over time, but it
makes sense for the whole workforce," says Kevin E. Cahill, a
research economist at Boston College's Sloan Center on Aging and
Work. "Younger workers can tap into the knowledge that the older
crowd has, and make sure it doesn't get lost lost."
Worker interest in a flexible glide path to retirement is
strong, and it's not limited to the federal payroll. A survey
this year by the Transamerica Center for Retirement Studies
found that 64 percent of workers - of all ages - envision a
phased retirement involving continued work with reduced hours.
For workers closest to retirement, frequently cited reasons for
continued work included financial need (34 percent) and a desire
for income (19 percent). But 34 percent had a desire to "stay
involved" or said they enjoyed their work.
Employers have been slow to respond. Just 21 percent of
respondents to the Transamerica survey said their employers
offer phased retirement - and that figure may be too optimistic.
The Society for Human Resource Management reports that 11
percent of employers provide some version of phased retirement,
with only 4 percent having formal programs. Cahill's research
shows similar employer disinterest in phased retirement
"Sometimes there are institutional or administrative
restrictions," he says. "And some employers may have good
reasons not to offer flexible hours."
Much more common, he found, are workers who find what they
need by changing jobs. "These are bridge jobs that carry people
through from their careers to withdrawal later on from the labor
force," he says.
Some experts think phased retirement options will become
more popular as the economy improves and labor markets tighten,
particularly as demand for specialized skills rises. And the
federal government's move could be a catalyst for change in the
Each federal agency will write its own eligibility rules,
and phased retirement won't be a guaranteed right for all
workers. But basic eligibility will depend on which of the two
major federal retirement programs covers an employee.
The government has a legacy Civil Service Retirement System
(CSRS), a traditional defined-benefit system, and the newer
Federal Employees Retirement System (FERS), a
defined-contribution program with a small traditional pension
CSRS employees will be eligible for phased retirement at age
55 with 30 years of service, or at 60 with 20 years of service.
FERS employees must be 60 with 20 years of service, or have 30
years of service and have reached their minimum
Interest in the program is strong, according to Jessica
Klement, legislative director of the National Active and Retired
Federal Employees Association.
"The number of phone calls we get from members tells me
there are a lot of people waiting for this," she says. "Many of
them are ready to take a step back, but they don't really want
to quit yet."
For more from Mark Miller, see link.reuters.com/qyk97s
(Follow us @ReutersMoney or here.
Editing by Douglas Royalty)