Why We Need to Rethink Public-Sector Retirement

Older workers have a lot to offer. Government needs their contributions more than ever.
March 29, 2017
By Howard Risher  |  Contributor
Consultant focusing on public-sector pay and performance

A recent New York Times column made me recall a lesson I learned almost 40 years. "Their Jobs Keep Them Healthy" was the article's title, and its point was that delaying retirement can be good for "the brain and the body." Delaying retirement by key contributors is good for employers as well. Keeping employees with valuable job knowledge working in some capacity is at least a partial answer to the kind of staffing crisis that governments in particular face. And of course it reduces pension costs.

Early in my consulting career, I was asked to play a role in assessing the market for retirement counseling. We dug into the research and talked to several experts. That made me aware that professionals in legal and medical occupations -- who could presumably afford to retire -- often continue working and remain productive into their 80s. Today, of course, increasing numbers of workers in all occupations continue working on some basis or would like to do so after the "normal" retirement age of 65.

Age 65 has been solidly entrenched as the time to retire since the Great Depression. In the 1930s, it was incorporated into the Social Security Act. But life expectancy for those born in 1930 was 58 for men and 62 for women. Today's life expectancy is close to age 80. A 60-year-old can expect to live another two decades or so.

The idea of delaying retirement clearly does not appeal to everyone, of course. There are workers who have awful jobs. They cannot wait to reach the date they are eligible to retire. My brother was one who told me -- at age 38 -- that he was looking forward to retirement. (Yes, he worked for a government agency.) Others have health problems or other personal considerations that make it difficult to continue working or to work full-time.

But for those who can continue working, and who are motivated to do so, the benefits are becoming clearer. "Work offers a routine and purpose," as the Times article put it, going on to quote an academic on the value of "activation of the brain and activation of social networks." Studies show that people who continue working benefit from the mental stimulation; those who retire lose contact with former colleagues and become increasingly isolated.

This is important to public employers because staffing, especially for high-demand occupations, will be a problem for years. The demographics of the U.S. workforce make that inevitable. The number of millennial workers entering the workforce is too small to replace those who will be eligible to retire over the next decade. The problem has been exacerbated by the damage to government's brand as an employer by years of layoffs and pay freezes. It will become increasingly severe in rural areas as young graduates continue to move to urban areas.

For government, a core element of the problem is the rigidity, enshrined in statute, of conventional-defined-benefit pension plans. With so many government retirement systems facing deep fiscal problems, many of those plans are going to be amended over the next few years, and when they are it will be important to introduce more flexibility on retirement age, continuing-work status and the calculation of benefits.

Until that happens, there are a number of ideas that public employers looking to keep valued workers nearing or at retirement age on the job can consider:

• Commit to a culture of multigenerational knowledge-sharing. Define formal mentoring and coaching roles that give older workers a reason to share their knowledge with younger workers. Create groups that include both older and young employees to discuss and collaborate in addressing problems and future operating plans. Offer older workers opportunities to use a portion of their work hours (perhaps a day or two a month) to develop proposals to improve the results of their units. Create a group of retired employees with recognized expertise and treat them as consultants who are available to tackle problems or serve as instructors.

• Take a hard look at current personnel policies. To start with, engage older employees in discussions of how their work experience can be enhanced; an important goal is understanding any policies or practices that undermine their ability to perform at their best. If there is employee dissatisfaction with recognition and reward practices, steps to improve them should be discussed in mixed groups of older and younger employees. Review the performance-management system and analyze recent personnel actions so that there are no reasons for claims of age discrimination. And provide training for managers and supervisors in dealing with the issues related to an aging workforce.

• Keep the specific personal needs of older employees in mind. Offer support for workers struggling with caregiving responsibilities; it's one of the primary reasons mature workers need work-schedule flexibility. And while a wellness program would benefit all employees, it could be especially valuable to older workers. It also would help to hold down medical costs.

The reality is that, particularly in the public sector, large numbers of older workers are convinced that they are not valued, and in fact too often an individual's value is not recognized until he or she is gone. The steps outlined here are far less costly than the time and investment needed to recruit and train replacements. Encouraging a productive employee to continue working and contributing is a win for everyone.