United States Government Accountability Office

GAO Testimony before the U.S. Senate Special 

Committee on Aging

OLDER WORKERS 

Some Best Practices and 

Strategies for Engaging and 

Retaining Older Workers 

Statement of David M. Walker 

Comptroller General of the United States 

For Release on Delivery

Expected at 10:30 a.m. EST 

Wednesday, February 28, 2007 

 

GAO-07-433T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 28, 2007

OLDER WORKERS

Some Best Practices and Strategies for 

Highlights of GAO-07-433T, a testimony Engaging and Retaining Older Workers 

before the U.S. Senate Special Committee 

on Aging 

More Americans remaining in the 

workforce at older ages could lead 

to benefits at several levels. First,

working longer will allow older 

workers to bolster their retirement

savings. Second, hiring and

retaining older workers will help 

employers deal with projected 

labor shortages. Third, older 

workers will contribute to 

economic growth and increase

federal revenues, helping to defray

some of the anticipated costs 

associated with increased claims 

on Social Security and Medicare. 

Despite all of these gains to be had, 

there are barriers to continued 

employment for older workers. In

addition, some employers remain 

reluctant to engage and retain this 

group. It is in the nation’s interest

for people to work longer, which

requires that barriers to continued

work be removed sooner rather 

than later. 

This testimony highlights issues

discussed at a recent forum GAO 

convened on engaging and

retaining older workers, as well as

prior GAO work. Forum

participants included experts 

representing employers, business 

and union groups, advocates, 

researchers, actuaries, and federal

agencies. These highlights do not 

necessarily represent the views of 

any one participant or the 

organizations that these participants 

represent, including GAO.

 

Obstacles continue to exist for older workers seeking continued or new 

employment and for employers who want to attract or retain older workers. 

The following obstacles, best practices, lessons learned, and strategies to 

address some of these obstacles and promote work at older ages were 

discussed at a recent GAO forum on older workers. 

Key Obstacles 

• Some employers’ perceptions about the cost of hiring and retaining older 

workers are a key obstacle in older workers’ continued employment. 

• Workplace age discrimination, the lack of suitable job opportunities, 

layoffs due to changes in the economy, as well as the need to keep skills 

up to date, are all challenges facing older workers. 

• Strong financial incentives for workers to retire as soon as possible and 

some jobs that are physically demanding or have inflexible schedules 

provide strong disincentives to continued work. 

Best Practices and Lessons Learned 

• Use nontraditional recruiting techniques such as partnerships with 

national organizations that focus on older Americans. 

• Employ flexible work situations and adapt job designs to meet the 

preferences and physical constraints of older workers. 

• Offer the right mix of benefits and incentives to attract older workers 

such as tuition assistance, time off for elder care, employee discounts, 

and pension plans that allow retirees to return to work. 

• Provide employees with financial literacy skills to ensure they have a

realistic plan to provide for retirement security. 

• Treat all employees in a fair and consistent manner and employ a 

consistent performance management system to prevent age 

discrimination complaints. 

Strategies 

• Conduct a national campaign to help change the national mindset about 

work at older ages. 

• Hold a national discussion about what “old” is to help change the culture 

of retirement. 

• Create a clearinghouse of best recruiting, hiring, and retention practices 

for older workers. 

• Strengthen financial literacy education to help workers prepare to retire.

• Make the federal government a model employer for the nation in how it 

recruits and retains older workers. 

• Create a key federal role in partnerships to implement these strategies. 

• Consider specific legislation or regulations to increase flexibility for 

employers and employees to create new employment models. 

www.gao.gov/cgi-bin/getrpt?GAO-07-433T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Barbara 

Bovbjerg at (202) 512-7215 or 

bovbjergb@gao.gov. 
Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss how providing additional 

opportunities and incentives for older workers to continue to contribute 

their considerable skills and knowledge is vitally important to the wellbeing of both such individuals and our national economy. By the way, 

while some people talk about “older workers,” I prefer to use the term 

“seasoned workers” to reflect the skills and knowledge that these workers 

have. But whatever term we use, more Americans remaining in the 

workforce at older ages could lead to benefits at several levels. First, 

working longer will allow older workers, many of whom are not 

adequately prepared for retirement, to bolster their retirement savings. 

Second, hiring and retaining older workers will help employers deal with 

projected labor shortages in the future. Third, older workers will 

contribute to economic growth and increase federal revenues, helping to

defray some of the anticipated costs associated with increased claims on

Social Security and Medicare. Fourth, several studies show that the longer

persons remain mentally and physically active, the longer they are likely to

live. 

Despite all of these gains to be had, there are barriers to continued 

employment for older workers. In addition, some employers remain 

reluctant to engage and retain this group. While many, including GAO, 

have reported on the benefits associated with work later in life, not 

enough has been done to address this issue. Many employers are still 

unaware of the need to engage older workers to meet their workforce 

needs, and few have implemented programs to engage or retain older 

workers. Similarly, many workers are not adequately preparing for 

retirement. 

The number of older workers is potentially large and is a growing part of 

the population. They represent a large and underutilized national resource 

with the potential to improve the economic well-being of themselves and 

the nation. At the same time, we must also consider those who cannot 

work longer due to health limitations or disability and make proper 

accommodations for them. 

Because of your continuing interest in older workers, today I will present 

the results of a recent forum on older workers, which I convened on 

Page 1 GAO-07-433T 
December 5, 2006, as well as discuss some of our prior work on this topic.1

At this forum, we brought together a diverse array of experts, including 

some employers from AARP’s “Best Employers for Workers Over 50” 

program; representatives from business and union groups, and federal 

agencies; along with advocates, researchers, actuaries, and academics, to

address issues related to engaging and retaining older workers. 

Specifically, the forum participants discussed (1) obstacles that older 

workers encounter when seeking continued work, (2) best practices for 

hiring and retaining older workers, and (3) general strategies to promote 

opportunities for older workers. The highlights summarized here do not 

necessarily represent the views of any individual participant or the 

organizations that these participants represent, including GAO. 

This forum is the latest in a series that GAO has held in recent years. The 

purpose of these forums is to bring together key stakeholders from diverse 

groups to discuss emerging issues with the hope of identifying areas of 

agreement. Such gatherings can serve as a catalyst for future actions, both 

individually and collectively, on the issue being discussed. For example, 

the Fiscal Wake Up Tour, a joint endeavor of GAO, the Concord Coalition, 

the Brookings Institution, and the Heritage Foundation, grew out of a 

forum on fiscal responsibility held in 2005 and is currently visiting cities 

around the nation to promote fiscal awareness.2

 In another example, a 

consortium of not-for-profit, private, and public sector efforts, known as 

the Key National Indicators Initiative, emerged from a forum on national 

 1

 The summary report of the forum is being released today as well. GAO, Highlights of a 

GAO Forum: Engaging and Retaining Older Workers, GAO-07-438SP (Washington, D.C.:

Feb. 28, 2007). For further information on older worker issues, please see the following 

reports and testimonies: GAO, Highlights of a GAO Forum: Workforce Challenges and 

Opportunities for the 21st Century: Changing Labor Force Dynamics and the Role of

Government Policies, GAO-04-845SP (Washington, D.C.: June 2004); GAO, Older Workers:

Demographic Trends Pose Challenges for Employers and Workers, GAO-02-85 

(Washington, D.C.: November 2001); GAO, Redefining Retirement: Options for Older 

Americans, GAO-05-620T (Washington, D.C.: Apr. 27, 2005); GAO, Older Workers: Labor 

Can Help Employers and Employees Plan Better for the Future, GAO-06-80 (Washington,

D.C.: Dec. 5, 2005); and GAO, Older Workers: Policies of Other Nations to Increase Labor 

Force Participation, GAO-03-307 (Washington, D.C.: Feb. 13, 2003). 

2

 GAO, Highlights of a GAO Forum: The Long-Term Fiscal Challenge, GAO-05-282SP

(Washington, D.C.: Feb. 2005). For more information on the tour, see,

http://www.concordcoalition.org/events/fiscal-wake-up/index.html 

Page 2 GAO-07-433T 
indicators that GAO hosted and co-sponsored with the National 

Academies in 2003.3

The aging of the baby boom generation presents both a challenge and an 

opportunity for our nation. Our past work has highlighted the importance 

of engaging and retaining older workers, and also, unfortunately, how little 

has been done to reap the benefits of this large and growing national 

resource. We convened this forum to continue our efforts to address 

issues associated with the aging of the American workforce. 

Summary 

Forum participants reported that obstacles to continued work at older 

ages remain, including employer perceptions regarding older workers, 

workers’ perceptions regarding the benefits of working longer, and limited 

job opportunities for older workers. To surmount some of these obstacles, 

forum participants suggested a variety of best practices, including offering

more flexible work arrangements and adapting job design to suit the needs 

of older workers. In addition, they said that the right mix of benefits and 

incentives was needed to attract older workers and that employees needed

additional financial literacy skills to ensure they have a realistic plan for 

retirement security. Participants offered a variety of strategies to move 

forward on this issue. These included a national campaign to promote 

work at older ages in the hope of changing the national mind-set and to 

engage in a national discussion to reconsider what “old” is, how we should 

think about retirement, and whether there should even be a retirement 

age. Participants also suggested the establishment of a national 

clearinghouse of best practices for engaging and retaining older workers. 

Efforts to increase financial literacy may also help workers plan for their 

futures and learn more about the benefits of working longer. Finally, 

participants outlined several federal actions that could help with this 

issue, including for the federal government to act as a model employer of 

older workers and to consider specific legislation or regulations that 

would increase flexibility for employers and employees to create new 

employment models. 

 3

 GAO, Forum on Key National Indicators: Assessing the Nation’s Position and Progress, 

GAO-03-672SP (Washington, D.C.: May 2003). For more information, see 

http://www.keyindicators.org/ 

Page 3 GAO-07-433T 
In the 21st century, older Americans are expected to make up a larger 

share of the U.S. population, live longer, and spend more years in 

retirement than previous generations. The share of the U.S. population age 

65 and older is projected to increase from 12.4 percent in 2000 to 19.6 

percent in 2030 and continue to grow through 2050. In part this is due to 

increases in life expectancy. The average number of years that men who 

reach age 65 are expected to live is projected to increase from just over 13 

in 1970 to 17 by 2020. Women have experienced a similar rise—from 17 

years in 1970 to a projected 20 years by 2020. While life expectancy has 

increased, labor force participation rates of older Americans only began to

increase slightly in recent years. As a result, individuals are generally 

spending more years in retirement. In addition to these factors, fertility 

rates at about the replacement level are contributing to the increasing 

share of the elderly population and a slowing in the growth of the labor 

force. Also contributing to the slowing in the growth of the labor force is 

the leveling off of women’s labor force participation rate. While women’s 

share of the labor force increased dramatically between 1950 and 2000—

from 30 percent to 47 percent—their share of the labor force is projected 

to remain at around 48 percent over the next 50 years. By 2025 labor force 

growth is expected to be less than a fifth of what it is today. 

Background 

The aging of the baby boom generation, increased life expectancy, and 

fertility rates at about the replacement level are expected to significantly 

increase the elderly dependency ratio—the estimated number of people 

aged 65 and over in relation to the number of people of aged 15 to 64. In 

1950, there was one person age 65 or over for every eight people aged 15

to 64. The ratio increased to one to five in 2000 and is projected to further

increase to one person aged 65 and over for every three people aged 15 to

64 by 2050. As a result, there will be fewer younger workers to support a 

growing number of Social Security and Medicare beneficiaries. 

The aging of the population also has potential implications for the nation’s 

economy. If labor force growth continues to slow as projected, fewer 

workers will be available to produce goods and services. Without a major 

increase in productivity or higher than projected immigration, low labor 

force growth will lead to slower growth in the economy and slower growth 

of federal revenues. These circumstances in turn will accentuate the 

overall pressure on the federal budget, which will be encumbered with 

increased claims for benefits for seniors such as Medicare and Social 

Security, while relatively fewer workers are paying into the benefits 

systems. 

Page 4 GAO-07-433T 
Figure 1: U.S. Elderly Dependency Ratio (Population age 65 and Older Relative to Age 15 to 64), 1950-2000 and Projected 

2005-2050 

0

5

10

15

20

25

30

35

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Percentage

Year Source: United Nations.

Projected

Note: Population Division of the Department of Economic and Social Affairs of the United Nations 

Secretariat, World Population Prospects: The 2004 Revision and World Urbanization Prospects: The 

2003 Revision. Data for 2005 through 2050 are projected. The elderly dependency ratio equals the 

number of people age 65 and older divided the number between age 15 and 64, expressed as a 

percentage. 

As Americans live longer and spend more years in retirement, several 

factors contribute to the growing insecurity of retirement income. With 

greater life expectancies, individuals need to finance more years of 

retirement; however, many workers claim their Social Security benefits 

prior to reaching the full retirement age, which results in lower monthly 

payments. Not only do individuals need to make their money last longer; 

they also bear greater risk and responsibility for their retirement savings 

than in the past. About half of U.S. workers do not have a pension plan 

through their employer, and those who do are less likely than in the past to 

be covered by defined benefit (DB) plans. The shift from traditional DB 

plans to defined contribution (DC) plans places greater responsibility on 

workers to make voluntary contributions and make prudent investment 

decisions. It also increases the importance of workers preserving such 

savings for retirement. Moreover, rising health care costs have also made

health insurance and anticipated medical expenses increasingly important 

issues for older Americans. A long-term decline in the percentage of 

employers offering retiree health coverage has leveled off in recent years, 

but retirees face an increasing share of costs, eligibility restrictions, and 

Page 5 GAO-07-433T 
benefit changes that contribute to an overall erosion in the value and 

availability of coverage. Finally, it is clear that Social Security, Medicare, 

and Medicaid are unsustainable in their present form. When the needed 

reforms to these programs are made, one result will be that millions of 

individuals will have to assume increased responsibility for their economic 

security in retirement. These trends suggest that more and more 

Americans will find they have inadequate resources to finance retirement. 

For many, continued work past traditional retirement age may be the

solution. 

We, along with others, have highlighted the need to engage and retain 

older workers to address some of these challenges associated with an 

aging workforce. In 2001, we recommended that the Secretary of Labor 

form a broad interagency task force to develop regulatory and legislative 

proposals addressing the issues raised by the aging of the labor force and

to serve as a clearinghouse of information about employer programs to 

extend the work life of older workers. After strong encouragement from 

this Committee, this task force, which includes representatives from the 

Departments of Labor (Labor), Commerce, and Education, along with the 

Social Security Administration, began meeting in 2006 and plans to focus 

on three areas: employer response to the aging of the workforce; 

individual opportunities for employment in later years; and legal and 

regulatory issues regarding work and retirement. The task force intends to

release a report on its findings and strategies in summer 2007. In 2003, we

recommended that Labor review the Workforce Investment Act 

performance measure regarding earnings to ensure that this measure does 

not provide a disincentive for serving employed workers, some of whom 

might be older workers.4

 Labor has partially addressed this issue, but the 

potential for existing measures to have unintended consequences remains. 

In 2005, we held a series of focus groups with workers and retirees to 

better understand the factors that influence the timing of retirement. We 

found that health problems and layoffs were common reasons to retire and 

that few focus group members saw opportunities to gradually or partially 

retire. Workers also cited what they perceived as their own limited skills 

and employers’ age discrimination as barriers to continued employment.5

As part of this work, we also participated in a roundtable discussion with 

 4

 GAO, Workforce Training: Employed Worker Programs Focus on Business Needs, but

Revised Performance Measures Could Improve Access for Some Workers, GAO-03-353 

(Washington, D.C.: Feb. 14, 2003). 

5 GAO-06-80, pp. 25-26. 

Page 6 GAO-07-433T 
employers to learn what they were doing to hire and retain older workers. 

While these employers generally agreed that flexibility was the key feature 

necessary to recruit and retain older workers, few of them had developed 

programs to put this belief into practice. 

Building on this body of work, we convened this forum on older workers 

to address these issues. 

According to participants at our forum, some of the key obstacles that 

hinder continued work at older ages include: first, employer perceptions 

about the cost of employing older workers; second, employee perceptions 

about the costs and benefits of continued work; and third, changes in 

industry and job skill requirements, which may hinder older workers from

remaining employed or finding suitable new employment. 

Obstacles to Engaging 

and Retaining Older 

Workers

First, many employers cite both compensation—including the rising cost 

of health insurance—and training costs as obstacles to hiring and retaining 

older workers. In addition, forum participants reported that many 

employers have not learned to place a high value on their experienced 

workers, instead gearing their succession planning toward replacing older 

workers with younger ones. Forum participants also cited negative

stereotypes surrounding older workers that include the belief that such 

workers produce lower-quality work than their younger counterparts, and 

less work overall. Also, many employers believe that older workers are 

resistant to change. Finally, but not least, it was suggested that some 

employers are hesitant to hire older workers for fear of age discrimination 

lawsuits. While many employers express an interest in recruiting older 

workers, our prior work has found that few develop programs to do so. 

At the same time that there is some resistance among employers to hiring 

older workers, there are also strong incentives for workers to retire. 

Participants noted that a “culture of retirement” exists in this country 

which encourages workers to claim retirement benefits and stop working 

as early as possible. The availability of Social Security at age 62 and high 

effective tax rates on earnings between age 62 and Social Security’s full 

retirement age may discourage some workers from continuing to work 

once they start claiming benefits. Workers who receive Social Security 

benefits but have not yet reached the full retirement age will have their 

benefits reduced by one dollar for every two or three dollars that they earn 

above a set threshold due to the Social Security earnings test. As a result, 

workers who have claimed Social Security benefits at 62 may not feel that

it is worthwhile to continue working. Also, the structure of traditional DB 

Page 7 GAO-07-433T 
pension plans may encourage retirement because pension laws have 

prohibited working for the same employer while receiving benefits. While

the Pension Protection Act of 2006 does contain a provision that allows 

plans the option of providing some benefits to participants who remain in 

the workforce at age 62 and beyond, it is too soon to determine what the 

impact of this policy change will be.6

 In addition to these financial 

incentives, jobs that are physically demanding or have inflexible schedules

that compete with family caregiving needs also provide strong 

disincentives to continued work. 

For some, the incentive to retire lies in the lack of suitable job 

opportunities. Some employers are reluctant to offer flexible work 

arrangements such as part-time work to existing employees. In addition, 

layoffs due to changes in the economy, along with the lack of skills needed 

to compete in the global economy, are also challenges facing older 

workers. Forum participants reported that employers who downsize may 

lay off older workers sooner than younger workers, in part because older 

industries tend to have a disproportionate number of older workers in 

their labor force. Positions of some low-skill older workers also may have 

been automated, eliminated, or outsourced. At the same time, displaced 

older workers may lack the necessary training to make a career change. 

Our past work has found that when older workers lose a job, they are less 

likely than younger workers to find other employment.7

We, along with others, have previously reported on the importance of 

flexibility in recruiting and retaining older workers. In order to effectively 

engage older workers, forum participants suggested implementing new 

recruiting approaches, workplace flexibility, the right mix of benefits and 

incentives, financial literary education, and consistent performance 

management systems. Moreover, participants warned against designing a 

“one-size-fits-all” approach, noting the significant differences among 

employers and employees. 

Best Practices and 

Lessons Learned on 

Engaging and 

Retaining Older 

Workers

 6

 See Section 905 of the Pension Protection Act, Pub. L. 109-280. 

7 GAO-02-85, p. 3.

Page 8 GAO-07-433T 
Employers have found innovative recruiting techniques to identify and 

recruit older workers. For example, some employers have established 

partnerships with national organizations, such as AARP, to help advertise 

themselves as employers of older workers. Other employers rehire their 

own retirees for specific needs, both short-term and long-term. For 

example, one employer actively retrains its employees for other distinct 

roles in the organization. 

Labor force decisions of older workers are also influenced by the 

availability of flexible work arrangements. Full and complete withdrawals 

from the workforce are no longer as common as they once were, but 

rather workers are more likely to seek out phased retirement or bridge 

employment options. Employers who are creative in how they design jobs,

and who allow for flexible work locations away from the traditional office, 

have an advantage in engaging older workers. One employer mentioned 

three reasons older workers retire: (1) elder care responsibilities, (2) 

physical constraints, and (3) a desire to pursue other interests. To address 

these concerns, this employer provides workers 10 days off each year for 

elder care, and flexible work schedules. Two employers have a “snow 

bird” program, which allows employees who live in different places during 

the year to work in both locations. Other employers have adapted job 

designs to accommodate the physical constraints of older workers. One 

participant mentioned a hospital that installed hydraulic systems in all of 

its beds so the beds could fold into a sitting posture, a change that assisted 

older staff in moving patients. In the second example, an employer 

modified an assembly line so that cars on the line could be rotated to grant

easier access for mechanics who were unable to lie down to work on cars. 

New Approaches Being 

Used to Engage Older 

Workers

Flexible Schedules and 

Workplaces Needed to 

Attract and Retain Older 

Workers

Benefit Packages Help to 

Attract and Retain Older 

Workers

Benefit packages that complement some of these new work arrangements 

are also important in attracting and retaining older workers. Some forum 

participants’ organizations offer benefits to both full- and part-time 

workers. One employer offers medical benefits and tuition reimbursement 

for employees working at least 15 hours per week, while another offers 

employee discounts. 

Modifying pension plans can also entice workers to work longer. One 

participant’s organization offers its employees the opportunity to retire 

and return to work after 1 month while still collecting pension benefits.8

 8

 This type of pension plan, known as a deferred retirement option plan (DROP), is largely 

limited to the public sector. 

Page 9 GAO-07-433T 
Another employer is considering matching a greater percentage of older

workers’ DC plan contributions, thereby appealing to older workers who 

may not have been with the company for a very long time. However, not 

every employer can offer such a portfolio of benefits for older workers 

who work part-time, due to the costs.

With older Americans living longer and spending more time in retirement, 

workers will have to ensure they have a realistic plan to provide for 

retirement security that may include working longer. Increasing financial 

literacy can help workers better prepare for retirement by giving them the 

tools to assess whether or not they have sufficient funds to retire at a 

particular age. With DC pension plans becoming more common, the 

burden of financial management on employees is growing, thereby 

increasing the importance of financial literacy. To address this issue, one 

forum participant’s employer offers a retirement-planning program for 

employees over 50 years old that includes individual counseling services. 

Another participant mentioned automatic enrollment in retirement savings 

plans as an effective way to help employees save for retirement, while also 

noting that employees need ongoing education to ensure their portfolios 

remain balanced. Such education should not be limited to only pension 

plans, as participants highlighted the need to plan for future health care 

costs as well. 

To limit exposure to age discrimination litigation, one participant said a 

consistent performance management system is essential for dealing with

all workers. Besides saying that all employees should be treated in a fair 

and consistent manner, participants agreed it is also important to show 

older workers that they are valued. 

Finally, when discussing best practices, forum participants cautioned 

against designing solutions with a “one-size-fits-all” approach due to the

variety of employers’ needs and workers’ knowledge, skills, and goals. 

Given the scope and importance of this issue, participants offered a 

number of strategies to encourage older workers to remain in the labor 

force and to encourage employers to engage and retain older workers. 

They generally agreed that a change was needed in the national mind-set 

about work at older ages and that a national campaign to promote this 

concept was needed. Such a campaign could highlight the different types 

of work older people are engaged in, the positive attributes of older 

workers, and the benefits to employers of engaging and retaining older 

Improving Employee 

Financial Literacy and 

Helping Employees Better 

Prepare for Retirement 

Suggested Strategies 

for Policymakers and 

Employers 

Page 10 GAO-07-433T 
workers. To change the “culture of retirement” that currently exists, one 

participant suggested the need for a national discussion to reconsider 

what “old” is, and how we should think about retirement, or if there should 

even be a retirement age. 

Participants also agreed that employers need information about the best 

practices for engaging and retaining older workers. One strategy discussed

was the establishment of a national clearinghouse of best practices, such 

as the different kinds of work structures, recruiting techniques, and 

workplace flexibilities used by some employers to attract and retain older

workers. 

Participants agreed that strategies that increase financial literacy may help

workers better plan for their futures and learn more about the benefits of

working longer. Although this is a long-term endeavor, participants 

suggested that both public and private efforts may be needed to promote 

financial literacy, including incorporating financial literacy into the grade

school curriculum, promoting the discussion of retirement planning much 

earlier in workers’ careers, and using faith-based organizations as a 

conduit for financial planning. 

Finally, participants discussed a number of ways that the federal 

government could be a leader in encouraging older workers to remain in 

the workforce. First, as an employer of millions facing the impending 

retirement of many of its workers, the federal government should “lead by

example” and be a role model in how it engages and retains older workers. 

Second, it can help to foster the kinds of public/private partnerships that 

would promote the national campaign, begin a national discussion, or 

contribute to the national clearinghouse discussed above. In addition, the 

public sector, in cooperation with the private sector, can help displaced 

older workers who need new skills to remain in the workforce. And third, 

through specific legislation or regulations that would increase flexibility 

for employers and employees, the federal government can help create new 

models of employment for older Americans. For example, some 

participants discussed the need for safe harbors in the tax code and the 

Employee Retirement Income Security Act that would make it easier for 

people to return to work after retirement and still collect their pensions. 

The related provision in the Pension Protection Act, which affords some 

flexibility in this area, represents a step in the right direction. Another 

participant suggested that age discrimination laws may have had some 

unintended consequences, and that these laws should be reevaluated or 

amended to provide safe harbors that would encourage employers to hire

older workers. 

Page 11 GAO-07-433T 
Engaging and retaining older workers is critical for promoting economic 

growth, improving federal finances, and shoring up retirees’ income 

security. Given the right mix of incentives, programs, and job designs, we 

have an opportunity today to support those who wish to work later in life, 

thereby reinventing the traditional concept of retirement, helping to 

bolster individuals’ retirement security, and fostering economic growth. 

With the oldest members of the baby boom generation eligible to begin 

collecting early Social Security benefits next year, time is running out to 

seize this opportunity. We convened this forum because of the importance 

of engaging and retaining older workers, and we congratulate this 

Committee for its sustained leadership on this issue. 

Conclusions 

Given existing trends in the aging of baby boomers, pressures on federal 

entitlement programs, and threats to individuals’ retirement security, it is 

in the nation’s interest for people to work longer. Harnessing the benefits 

of this growing group of potential older workers requires that barriers to 

continued work be removed sooner rather than later. At the same time, it 

is important to acknowledge that not everyone can work at older ages, and 

proper accommodations are needed for such persons as well. 

Despite evidence indicating the future importance of older Americans to 

the workforce, barriers and perceptions continue to get in the way of 

making progress. Forum participants generally agreed that employers do 

not place a high enough value on experienced workers, and that suitable 

job opportunities are lacking for older workers. These findings echo many 

of those that we heard in our 2005 focus groups and reiterate findings from 

our 2001 report. While some progress is being made, in the absence of 

additional change, we risk a missed opportunity to engage those workers 

who wish to remain in the workforce longer. 

At our forum, there was a good deal of enthusiasm among participants to 

confront this issue, and I hope that by sharing some best practices and 

suggested strategies today progress will continue with renewed insight 

and energy. At the same time, given the national scope of the challenge, 

addressing it will require not only workers and employers. Clearly, there is

also a role for government to play, whether it be through becoming a 

model employer of older federal employees or helping to foster flexible 

work arrangements in the private sector to meet the needs of older 

workers, or by considering legislative and regulatory changes, including 

those that Labor’s interagency task force may propose. Finally, 

consideration of the current mix of federal policies—including Social 

Security, Medicare, and pension laws—may be warranted to ensure that 

their incentives are appropriate given future demographic changes and the 

Page 12 GAO-07-433T 
benefits that can be gained from work at later years for both individuals 

and the nation. 

Mr. Chairman, this concludes my remarks. I would be happy to answer any 

questions you or the other members of the Committee may have. I am 

pleased by your continued interest in this area and look forward to 

working with you on this issue in the future. 

For questions regarding this testimony, please call Barbara Bovbjerg, 

Director at 202-512-7215. Other individuals making key contributions to 

this statement included Mindy Bowman, Alicia Puente Cackley, Jennifer

Cook, Scott Heacock, and Kevin Kumanga. 

Page 13 GAO-07-433T 

Contact and Staff 

Acknowledgments 

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