Some innovative employers have launched effective phased and partial retirement programs for their aging workers. These examples are provided as support for your proposal. Understanding that their use may or may not advance your request, they should at least serve as a demonstration that these options are workable in complex organizations. The basic material in these cases comes from the companies themselves.
This research-driven, patient-focused biopharmaceutical company depends on its 29,000 global employees to raise the standard of care for some of the world’s most critical medical conditions. In the US, over 3,000 employees are currently eligible to retire. One way AbbVie is addressing retention of this highly skilled, technically unique workforce is by offering a phased retirement program, originally rolled out in 2008.
The program is open to employees 55 or older with at least 10 years of service. It is voluntary with manager approval. There is an annual enrollment and a formal proposal process that includes a knowledge transfer and work redesign plan. Manager and employee agreement on these documents is required.
Available program options include:
- Employees reduce their full-time schedule to four days per week or take up to five weeks additional time off with a corresponding decrease in pay and bonus, but no impact to benefits
including pension and 401(k),
- Employees keep their same schedule, pay and bonus but modify responsibilities such as staff supervision or travel roles, in exchange for assuming a critical mentoring or “knowledge transfer” role, or
- Employees choose both of the options above.
Over 260 AbbVie employees have participated in the program in the past 4 years. In 2017, AbbVie planned to launch an education campaign targeted to managers and HR business partners so they are equipped to use the program to retain both employees and knowledge.
Herman Miller recognized that transitioning from a career into retirement is not easy. While many of us look forward to more relaxation, travel, and family time, retirement is also filled with many unknowns. Have I saved enough money? What will I do with my time? Will I miss my friends and colleagues at work?
Retirement is challenging for businesses as well, because when seasoned employees leave, they take years of knowledge and wisdom along with them. The typical service among our employees is quite long, which means that a significant percentage of our workforce is quickly approaching retirement. This required us to think critically about the future talent needs of Herman Miller, and devise a unique solution that benefits both team members and Herman Miller.
The Solution: FlexRetirement, a phased retirement program that allows team members to transition out of work over a six month to two-year period. The program launched in 2012, and is available to all employees 60 years of age or older with at least five years of service. Participants benefit by working fewer hours per week, but still maintain an income, benefits, and connections to social networks. The next generation of talent benefits through a deliberate plan for mentorship and the opportunity to advance as a result of these development opportunities. And Herman Miller is able to more accurately identify talent gaps and strategically plan to address those needs.
The FlexRetirement program is just one example of Flexible Work Arrangements offered to Herman Miller team members (shown below). For employees who may not be ready to commit to a retirement date, FlexYear, FlexPartTime or regular part time employment are other options to ease into retirement. The Flexible Work Arrangements (FWA) Program is something all team members can utilize, no matter their unique circumstances or the stage of life they’re in.
The FlexRetirement Program has been a win-win for Herman Miller and their workforce. Not only do they support their employees as they embark on a new chapter in life, they’re also positioning the company for success as they navigate the talent shift.
- FlexTime allows participants to work hours that are outside the standard 8:00 am – 5:00 pm shift, often coming in earlier or later.
- FlexWeek enables participants to compress their work week into fewer days by working longer shifts for several days.
- FlexPlace is for team members who need to work in a different physical location other than the standard Herman Miller office.
- FlexPartTime is great for those who are trying to ease back into work – often times after the birth of a child or other major life change – and they can work temporarily part time until they’re ready to return as a full time employee.
- The FlexShare program allows team members to share responsibilities with another team member and work part time.
- The FlexYear accommodates unique circumstances where someone may need to take an extended period of time off. They may have travel plans or need to tend to family matters, but plan on returning to work at a later point in the year.
- FlexRetirement allows team members to transition out of work over a six month to two-year period.
This San Diego-based system includes four hospitals, 19 outpatient facilities and 13,000 employees.
As part of the Scripps Life Cycle employment concept, the organization looks for ways for employees to phase into retirement over a period of years by providing flexible scheduling and benefits to part time employees. As an employer, phasing allows Scripps to retain a highly skilled employee base with a wealth of experience and to keep the older, experienced employee on the payroll for as long as possible.
To accommodate those employees who are considering flexible retirement options, Scripps has implemented retiree benefits in a phased approach. Individuals may select their retirement options based on their lifestyle. As a health care provider and employer, Scripps is very aware of the rising costs of healthcare, and especially its impact on retiring employees. They offer several health insurance options for phasing retirees—early retirement, staged retirement, and Medicare-eligible retirement. At Scripps, the average age of an RN is 47, and it is continuing to rise.
As departmental needs change, respectful exits can be a way of supporting older exempt staff (“officers of administration”) and staff continuity. Those age 55 or over with 10 years of service who are now contemplating retirement can explore the possibility of a phased retirement. This allows them to gradually decrease their workload instead of going immediately into full retirement.
During this period, the officer retains his or her full-time status. Salary and salary-dependent benefits are prorated to reflect the decreased workload. The officer can supplement a decrease in pay with pension or annuity money, withdrawn without incurring a tax penalty. This period ends with the officer’s full-retirement date, which is established at the outset in the officer’s Phased Retirement Agreement.
Phased retirements can benefit departments as well as officers. It may give a department time to hire and train a replacement—or to restructure positions within the department—with the benefit of the retiring officer’s continuing input. On the other hand, a department is under no obligation to grant a phased retirement that’s unworkable from its standpoint.