Employers are sprucing up benefits such as flexible work schedules and retirement planning to retain older workers, according to Bank of America Corp.
About 94 percent of employers said they think it’s important to keep older workers because the companies need their skills, said a study released today by the Charlotte, North Carolina-based bank. Employers are offering customized schedules, education on retirement and health care, and the ability to work from home, according to the study, which is based on interviews with 650 company executives and benefit administrators from April 19 to April 23. The businesses surveyed had from $5 million to $2 billion in revenue last year and at least 100 employees.
“They believe that older workers are essential to the company’s success,” said Andy Sieg, head of retirement services for Bank of America Merrill Lynch, which provides retirement services to companies and individuals, and is responsible for $545 billion in assets as of March 31. “They understand the secular trend is one where there is likely to be some shortages in terms of skilled workers to fill key roles in companies.”
The jobless rate among workers age 55 and over rose in May to 6.8 percent from 6.5 percent in April, according to the U.S. Bureau of Labor Statistics. The national unemployment rate was 9.1 percent in May, Labor Department figures show.
Older workers tend to remain out of work for longer periods than younger employees once they lose their jobs, said Emy Sok, an economist at the bureau. Workers age 55 and above were out of work about 41 weeks on average last year, compared with 35 weeks for those age 25 to age 54.
About half of employers surveyed are offering flexible or customized schedules to older employees and 22 percent give them the opportunity to work remotely, according to the report. About a third of companies are providing education about retirement income and health-care issues.
“If programs and strategies aren’t in place you’re going to let all that talent and knowledge out the door,” said Chasity Miller, managing director of compensation and benefits for AGL Resources Inc., a natural gas distribution company based in Atlanta. “We want to make sure that we retain talent and have time to transfer the knowledge to younger workers.”
AGL, which has about 2,500 employees, is starting a “phased-retirement program” in July to give workers who retire the opportunity to return on a part-time or project basis, and still have access to the company’s benefit programs such as its 401(k) savings plan, said Miller. Bank of America is the administrator of AGL’s retirement plans.
Workers have been remaining in the labor force longer before retiring since the 1990s, said Steven Sass, an associate director at Boston College’s Center for Retirement Research. The shift from traditional pensions to 401(k) savings plans means employees may not have enough income at age 62 or age 65 to replace their earnings during retirement, Sass said.
The rate of people age 55 and older participating in the labor force, which means they are either working or looking for employment, was 40.3 percent in May, compared with 29.2 percent in 1993, said Sok of the Bureau of Labor Statistics.
Workers who are able delay their retirement past age 65 still may not have enough income to cover their basic expenses and any uninsured health-care costs once they stop working, according to a June report from the Washington-based Employee Benefit Research Institute.
“You just can’t simply go through your career not saving assuming that well if I get to 65 and I defer retirement a couple of years I’ll be fine,” Jack VanDerhei, EBRI’s research director said. “It’s simply not going to be the case for everybody.”