"Phased Retirement Options"
Analyze the three retirement options you prepared according to the skill builder instructions and make your recommendation to the company about which to implement.
According to a 1986 amendment to the Age Discrimination in Employment Act (ADEA), most employees cannot be forced to retire at a specific age. As a result, employers have had to develop policies to comply with these regulations. In many employer pension plans, "normal retirement" is the age at which employees can retire and collect full pension benefits. Employers must decide whether individuals who continue to work past normal retirement age (perhaps 65) should receive the full benefits package, especially pension credits. Some changes in Social Security regulations have increased the age for full benefits past age 65, so modifications in policies may occur. Another issue involves the amount health care benefits provided to retirees, and recent EEOC guidelines indicate that companies can spend less on benefits for retirees who are 65 and older compared to their younger counterparts without committing age discrimination (Armour, 2007).
Many pension plans include provisions for early retirement to give workers voluntary opportunities to leave their jobs. After spending 25 to 30 years working for the same employer, individuals may wish to use their talents in other areas. Phased-in and part-time retirements are alternatives being used by individuals and firms.
Some employers use early retirement buyout programs to cut back their workforces and reduce costs. Employers must take care to make these early retirement programs truly voluntary. Forcing workers to take advantage of an early retirement buyout program led to the passage of the federal law discussed next. "Older Workers Benefit Protection Act passed in 1990; the OWBPA amended the ADEA and overturned a decision by the U.S. Supreme Court in Public Employees Retirement System of Ohio v. Betts" (Public Employees Retirement System of Ohio v. Betts, 109 S. Ct. 256, 1989). This act requires equal treatment for older workers in early retirement or severance situations. It also sets forth some specific criteria that must be met when older workers sign waivers promising not to sue for age discrimination. (Mathis & Jackson, 2011)