February 2007 

HIGHLIGHTS OF A GAO FORUM

Engaging and Retaining Older Workers 

Highlights of GAO-07-438SP, a GAO 

forum. 

Forum participants discussed obstacles, best practices, and lessons learned 

from programs to help those older workers who can to work longer and 

better prepare for retirement. Participants also considered strategies for 

encouraging organizations to implement practices that will result in more 

opportunities for 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; 

total compensation and training costs were seen as primary concerns. 

• Workplace age discrimination, the mismatch of workers’ skills and 

availability of jobs because of changes in the economy, as well as the 

need to keep skills up to date, are all challenges facing older workers. 

• There is a more limited pool of interested workers because of financial 

incentives to retire as soon as possible, workers’ desire to retire or 

change careers, and some jobs’ requirements that make continued work 

unappealing or unfeasible because of health issues.

• Legal and regulatory requirements hinder hiring and retaining older 

workers. 

Best Practices and Lessons Learned 

Participants shared examples of best practices and lessons learned, such as 

• Use nontraditional recruiting techniques such as partnerships to help 

identify and recruit older workers. 

• 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, and employee 

discounts. 

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

consistent performance management system to prevent age 

discrimination complaints. 

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

realistic plan to provide for retirement security. 

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. 

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

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

for older workers. 

• 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. 

In the future, older Americans are 

expected to be a larger share of the 

U.S. population, live longer, and 

spend more years in retirement than 

previous generations, and by 2025

labor force growth is expected to be

less than a fifth of what it is today. 

Without major increases in

productivity or immigration, low 

labor force growth will ultimately 

lead to slower economic and federal 

revenue growth. This in turn will 

accentuate the overall pressure on

the federal budget, which will face 

increased claims for Medicare and 

Social Security benefits while

relatively fewer workers pay into the 

benefits systems. Moreover, the 

possible loss of many experienced 

workers as the baby boomers retire 

could lead to further adverse effects. 

If older Americans were to remain in 

the labor force longer, it could ease

some of the pressures on Social 

Security, supplement individual 

retirement incomes, and help finance 

health care. However, researchers

have suggested that barriers may 

impede some older workers who 

want or need to work.

GAO convened this forum to address

the issues surrounding engaging and

retaining older workers. 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.

www.gao.gov/cgi-bin/getrpt?GAO-07-438SP.

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. 

United States Government Accountability Office
Contents 

Letter 1

Introduction from the Comptroller General of the United States 1

Key Obstacles to Engaging and Retaining Older Workers 4 

Best Practices and Lessons Learned 9 

Suggested Strategies 14 

Appendix I List of Participants 17 

Appendix II Agenda 20 

Related GAO Products 21 

Abbreviations 

DB defined benefit 

DC defined contribution 

DROP deferred retirement option plan 

ERISA Employee Retirement Income Security Act 

This is a work of the U.S. government and is not subject to copyright protection in the 

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reproduce this material separately. 

Page i GAO-07-438SP Older Workers Forum
United States Government Accountability Office

Washington, DC 20548 

Introduction from the 

Comptroller General 

of the United States 

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

declining birth rates have created a demographic tsunami that poses 

serious future challenges for individuals, employers, and the economy. 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. At the same time, by 2025 labor force growth is 

expected to be less than a fifth of what it is today. Without a major 

increase in productivity or higher than projected immigration, low labor 

force growth will ultimately 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 Medicare and Social Security 

benefits while relatively fewer workers are paying into the benefits 

systems. 

An additional concern is the possible loss of many experienced workers as 

the baby boomers retire. Employers face challenges in engaging and 

retaining older workers, that is, recruiting seasoned workers, adapting job

designs and making workplace accommodations, and keeping workers 

past the traditional retirement age. Some research has indicated that the

impending retirements of the baby boom generation and the decline in the 

growth of the labor supply could affect certain industries and occupations

more than others. These trends could create gaps in skilled workers and 

managerial occupations in particular, leading to further adverse effects on

productivity and economic growth. 

As older Americans live longer and spend more years in retirement, they 

will face several challenges that contribute to the growing insecurity of 

retirement income. First, while more older Americans are working, there 

is a cultural expectation that workers should claim Social Security 

benefits as soon as they become eligible; many workers claim them prior 

to reaching the full retirement age, resulting in lower monthly payments.1

Second, workers bear greater risk and responsibility for their retirement 

 1

The full eligibility age (or normal retirement age) for Social Security benefits is being 

raised gradually from 65 to 67. When the full eligibility age was 65, the actuarial reduction 

for taking benefits at age 62 was 20 percent. When the age increase to 67 is fully 

implemented, in 2022, the reduction will be 30 percent. The reduction in monthly payments

for claiming early Social Security retirement benefits takes account of the longer period of

time over which benefits will be paid.

Page 1 GAO-07-438SP Older Workers Forum
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, which pay a specified

amount per month based on the workers’ pay and job tenure. Employers 

have increasingly shifted from traditional DB to defined contribution (DC) 

plans, such as 401(k) plans, which are based on contributions and 

investment returns on individuals’ accounts. DC plans place greater 

responsibility on workers to make voluntary contributions and prudent 

investment decisions. However, in 2005, the personal savings rate declined

to the point at which Americans spent more than they received in 

disposable income. Rising health care costs have also made health 

insurance and anticipated medical expenses such as the potential need for 

long-term care increasingly important issues for older Americans. A longterm 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 benefit changes that contribute 

to an overall erosion in the value and availability of coverage. Thus, as 

older Americans face less secure retirements, many may need to continue 

working. 

If a larger proportion of older Americans were to remain in the labor force 

longer, even on a part-time basis, it could mitigate some of the economic

pressures on Social Security as well as supplement individual retirement 

incomes and help finance health care. However, researchers have 

suggested that age discrimination and pension statutes and regulations, 

among other factors, may present barriers that make it difficult for some 

older workers who want or need to work to do so. 

While many, including GAO, have reported on these trends and their likely 

consequences, not enough has been done to address them. Many 

employers are still unaware of these trends, and few have implemented 

programs to engage or retain older workers. Similarly, despite their 

increased risk, many workers are not adequately preparing for retirement. 

With the first baby boomers becoming eligible for Social Security retired 

worker benefits in 2008, the time to prepare for these challenges is running 

out, and employers and employees, as well as government, have a role to

play. 

GAO convened this forum on December 5, 2006, to address the issues 

related to engaging and retaining older workers. The forum brought 

together a diverse array of experts, including employers from AARP’s 

“Best Employers for Workers Over 50” program and representatives from 

business groups, unions, advocates, researchers, actuaries, academia, and 

Page 2 GAO-07-438SP Older Workers Forum
federal agencies. Forum participants discussed obstacles, best practices, 

and lessons learned from programs to help older workers to work longer 

and better prepare for retirement. Participants also considered strategies 

for encouraging more organizations to implement these activities on a 

larger scale. (See app. I for a list of forum participants and app. II for the 

forum’s agenda.) This forum was designed for the participants to discuss 

these issues openly, without individual attribution, in order to facilitate a 

rich and substantive discussion of these issues. 

This report summarizes the ideas and themes that emerged at the forum, 

the collective discussion of participants, and comments received from 

participants based on a draft of this report. The highlights summarized in 

this report do not necessarily represent the views of any individual 

participant or the organizations that these participants represent, 

including GAO. 

I want to thank all the forum participants for taking the time to share their

knowledge, insights, and perspectives. We at GAO will benefit from these 

insights as we carry out our work for the Congress and the country. I look

forward to working with the forum’s participants on this and other issues 

of mutual interest and concern in the future. 

David M. Walker 

Comptroller General 

of the United States 

February 28, 2007 

Page 3 GAO-07-438SP Older Workers Forum
We presented the results of a survey participants completed prior to the 

forum that asked them to identify obstacles employers face in engaging or

retaining workers who are past the traditional retirement age, factors that 

keep workers from working beyond the traditional retirement age, and any 

legal or regulatory requirements that impede hiring or retaining older 

workers. The key obstacles cited by participants in the survey and during

the forum discussion focused on employer perceptions about the cost of 

hiring and retaining older workers, perceptions about older workers’ skills 

and abilities relative to available jobs, skill gaps among older workers, and 

the limited pool of workers who want to work past traditional retirement 

age. 

Participants stated that some employers’ perceptions about the cost of 

engaging and retaining older workers is a key obstacle in older workers’ 

continued employment. Participants generally agreed that total 

compensation and training costs are among the most important concerns, 

although at least one participant challenged employers’ perceptions that 

the costs of older workers exceed the return on investment. 

• Employers are concerned about older workers’ total compensation 

costs relative to younger, less experienced workers. In particular, 

participants cited concern about the rising cost of health insurance. 

However, at least one participant challenged the assumption that older 

workers cost more, citing the value that older workers bring to a 

business. 

• Employers perceive that older workers cost more from a training 

perspective. For example, some participants stated that younger 

workers may have better computer and other technological skills. 

Also, employers are concerned about investing in training older 

workers because they may retire before the company recovers its 

training investment. 

Key Obstacles to 

Engaging and 

Retaining Older 

Workers

Employers’ Concern about 

Costs Associated with 

Older Workers 

Perceptions about Older 

Workers

Perceptions about older workers’ skills and abilities were cited as a key 

obstacle to engaging and retaining older workers. Participants generally

agreed that workplace age discrimination is a key obstacle to older 

workers’ continued employment. 

• Participants noted that workplace culture and employer perceptions 

can be unfriendly to older workers. Participants stated that many 

companies have not learned to place high value on their experienced 

Page 4 GAO-07-438SP Older Workers Forum
workers, and they do not understand that much of their organization’s 

intellectual capital and institutional memory can reside within their 

older employees. Perceptions held by employers include the idea that 

older workers will produce a lower quality and quantity of work, their 

poorer health will have an impact on productivity, they may be less 

flexible and more resistant to change, and have less capacity for 

training in new technology. Employers may also have the perception 

that as workers near retirement age, they disengage and await their 

retirement date. Employees may have their own perceptions about how 

they are valued. One participant said older workers may believe their 

life experiences will be disregarded. Another participant mentioned 

that older workers may not even apply for jobs because they often 

assume they will not get hired. 

Skill Gaps among Older 

Workers

Changing industries and required job skills can be an obstacle for older 

workers. Participants said that layoffs due to changes in the economy, as 

well as the need to keep skills up to date or retrain for a new career, are all 

challenges facing older workers. 

• Layoffs may affect older workers more than younger workers. Some 

participants expressed concern that employers may lay off older 

workers sooner than younger workers when downsizing. More 

specifically, one participant noted that declining older industries tend 

to employ older workers. Another participant mentioned that layoffs 

due to business restructuring in both manufacturing and professional 

service industries affect older workers disproportionately. Positions of 

some low-skill older workers may have been automated, eliminated, or 

outsourced, according to one participant. In many cases an employer 

may have changed the enterprise in which it had been engaged. For 

example, a computer hardware manufacturer who has matriculated to 

a software or service enterprise will no longer need the hardware 

engineers and other employees associated with manufacturing

processes. 

• Older workers may lack training to keep skills up to date or make a 

career change. In general, participants recognized the difficulties older 

workers sometimes have in finding employment that is comparable in 

skill level to their previous occupation. One participant stated that 

access to and financing of training is an issue, especially for career 

changers. Older workers may have no career adviser program to 

identify their skills and match them to a new position on a part-time 

basis that would benefit their organization. Yet another participant 

mentioned that there may be structural barriers to employers 

Page 5 GAO-07-438SP Older Workers Forum
identifying suitable applicants and high-skilled workers finding suitable 

employers. Finally, one participant stated that language barriers may 

be an issue for older legal immigrants in lower-skilled jobs who have 

limited English proficiency. 

Strong Incentives for Older 

Workers to Retire 

Participants generally agreed that there is a limited pool of workers 

interested in staying employed because of financial incentives to retire at 

the early retirement age, workers’ desire to retire or change careers, and 

some jobs’ requirements that make continued work unappealing. 

• Participants cited the structure of pension plans and Social Security 

as retirement incentives. 

• The structure of traditional defined benefit retirement plans 

encourages retirement because some pension statutes and 

regulations have traditionally prohibited working for the same 

employer while receiving benefits.2

• The Employee Retirement Income Security Act’s (ERISA) 

anticutback rule prohibits employers from making amendments to 

their pension plans that would have the effect of eliminating or 

reducing an early retirement benefit. This may make it slow and 

complicated for employers to amend plans to raise retirement ages. 

• The availability of Social Security at age 62 and high effective tax 

rates on earnings may encourage some workers to retire. They may 

view the after-tax income from continued work as too little to

compensate for the trouble and effort. 

• Workers who receive Social Security benefits and have not yet 

reached the normal retirement age may have their benefits reduced 

because of the “retirement earnings test.” More specifically, if an 

early retiree worker’s annual earnings exceed a certain threshold, 

$1 of Social Security benefits will be withheld for every $2 or 

$3 earned, depending on whether or not the worker reaches the 

normal retirement age that year. 

• Disincentives also exist for workers with disabilities who generally 

must show that they cannot work in order to qualify for Social 

Security disability benefits. 

• Workers want to retire or change careers. Participants expressed 

concern about a “culture of retirement” in the United States that leads 

 2

However, the Pension Protection Act of 2006 permits employers to make in-service 

distributions to employees age 62 and older.

Page 6 GAO-07-438SP Older Workers Forum
many workers to retire at the earliest available opportunity. Some of 

these workers think they have the means to retire, but may not. Also, 

the focus on wellness and healthy lifestyles has created a frame of 

mind that retirement is another phase to enjoy an active lifestyle but in 

a different setting. Many skilled workers are likely to want to venture 

into another career. 

• Participants listed job requirements, such as inflexible work

schedules, lack of suitable work, physically demanding work, and 

family needs, such as caregiving, as other disincentives to continued 

work. 

• Lack of employer flexibility with regard to hours and vacations and 

phased retirement was one of the most frequently cited concerns. 

• The availability of jobs that match workers’ preferences is another 

issue. While one participant noted that older workers often do not 

want to learn new skills, many participants mentioned the 

unavailability of work that is suitable to being part-time labor, the 

challenge of generating and managing consulting assignments for 

high-skilled workers, and limitations of human resource and 

pension systems that do not facilitate shifting to a less stressful role 

in the company as potential barriers. Participants also mentioned 

job location as influencing a job’s desirability. Some older workers 

look toward relocation later in life or desire geographic mobility to 

spend more time with family. 

• Most participants agreed that jobs that are too physically 

demanding encourage retirement. One participant noted that work 

capacity changes as people age and that health problems are 

realities for those over the age of 40. As a result, employers need to 

consider and address functional work capacity issues like cancer 

and back pain. Managing chronic diseases is critical to and can help 

hold health care costs down. 

• Family caregiving responsibilities frequently compete with work 

past traditional retirement age. Participants noted that caregiving 

can be a particularly big issue for workers who, whether for 

financial or cultural reasons, take care of their relatives or spouses 

at home. 

Other Factors Also Limit 

Older Workers 

• Legal and regulatory requirements hinder hiring and retaining older 

workers. 

• Employers fear age discrimination lawsuits related to hiring and 

firing decisions based on the Age Discrimination in Employment 

Act. One participant stated that nondiscrimination laws create a 

disincentive to hire older workers or implement phased retirement. 

Page 7 GAO-07-438SP Older Workers Forum
• Medicare’s Secondary Payer rule prohibits employers of a certain 

size from terminating employees’ health benefits when they become 

eligible for Medicare at age 65. This means that older workers 

continue to be entitled to the same health benefits as workers under 

age 65 and the employer’s plan continues to be the primary health 

insurer and payer. In these cases, Medicare becomes the 

supplementary insurer. 

• The tax code and Internal Revenue Service regulations permit 

employers to offer early retirement windows, provided certain 

conditions are met, that give employees an incentive to retire early. 

• The Fair Labor Standards Act limits most employers’ ability to 

provide compensatory time off, in lieu of paying for overtime, and 

therefore reduces employers’ incentive to provide flexible work 

arrangements to hourly workers. 

• Mandatory retirement ages in certain professions, such as law 

enforcement officers and airline pilots, have made it difficult for 

employers to retain older workers. 

• Succession planning may conflict with retaining older workers. One

participant noted that workforce management is generally geared 

toward replacing older workers with younger workers. Another 

participant stated that employers often view lower-skilled older 

workers as “expendable,” and therefore do not place high value on 

their retention or training and promotion. Finally, one participant noted 

that employers seek the flexibility to engage and retain those workers 

capable of performing the job at hand as well as learning new skills for 

the long run.

• Employers may not perceive a need to engage or retain older workers, 

or may not place a high priority on the issue. Participants disagreed 

about whether or not companies are aware of the need to engage or 

retain older workers. One participant stated that some companies may 

not yet realize that the population is aging and that there are fewer 

younger workers to hire. Another participant cited an example of one 

manufacturer that actively retains older workers. A few participants 

observed that while companies are becoming more aware of the 

growing need to hire older workers, the issue as a whole is a 

nonpriority for them. Businesses have generally been reluctant to 

commit to doing something about the issue. One participant stated that 

employers understand these complex issues, but those in decisionmaking roles may be avoiding the responsibility because they won’t be 

around to deal with the problem in the future. Also, officials in human 

resources departments of small and midsized companies are so busy 

that they cannot address these issues. Another participant stated that 

Page 8 GAO-07-438SP Older Workers Forum
corporations are only able to focus on one crisis at a time, and that 

they will not act until there is a crisis. 

• Obstacles differ by industry and type of worker, but are treated 

uniformly in legislation and regulations. Participants agreed that the

types of problems facing organizations and employees differ depending

on the industry and that it is important to talk about these issues in 

terms of different industries and different types of workers. Although 

these problems are different for different industries, the legislative and 

regulatory environment generally does not distinguish among 

industries regarding older worker issues. One participant cautioned 

against policies that promote downward mobility or have unintended 

consequences for younger workers or those with low incomes. 

Forum participants offered a range of insights, views, and examples from 

their experience and expertise in educating employers and in helping older 

workers to work longer and better prepare for retirement. Many of our 

forum employer participants, who have been recognized as best employers 

for older workers, have found that new approaches and incentives may be 

needed to engage and retain older workers. Other participants from 

business groups, unions, advocates, researchers, actuaries, academia, and 

federal officials also shared their experiences and knowledge of best 

practices and lessons learned. One key thread that emerged throughout 

the discussion was that treating employers and older workers with a onesize-fits-all approach would be a mistake for policymakers, as there are a

variety of employers with different needs and a variety of workers with 

different knowledge, skills, abilities, and goals. In order to effectively 

engage older workers, participants noted the need for new recruiting 

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

a consistent performance management system, and the need for older 

workers to feel they are valued. There was also general agreement that 

there is a need to improve the financial literacy of workers and help them 

better prepare for retirement. 

Best Practices and 

Lessons Learned 

Educating Employers 

about Older Workers 

Participants discussed methods they are using to educate employers on 

why they should care about engaging and retaining older workers. One 

participant’s organization is using community-based solutions in working 

to educate small employers about the need to hire older workers and 

assists them in addressing the issue. For example, this organization has 

been working with another organization in four communities to develop a

local curriculum on hiring and retaining older workers. Using employer 

Page 9 GAO-07-438SP Older Workers Forum
panels and other tools, this organization educates businesses about what 

is going on in their areas. 

Engaging and Retaining 

Older Workers 

One participant said that it is important to recognize that employers 

cannot all rely on the same recruiting techniques if they want to reach 

older workers. Another participant found that traditional recruiting 

mechanisms—job boards and newspapers—only find workers who are 

actively looking for work. To enhance their recruiting efforts, this and 

another participant have been using partnerships with other organizations 

to help advertise themselves as employers of older workers, for example,

working with the National Council on Aging and the AARP to recruit older 

workers. The AARP’s Featured Employer Program lists 30 national 

employers who hire older workers on its Web site. 

New Approaches Being Used to 

Engage Older Workers 

Information sharing can also be useful in engaging older workers. One 

participant’s organization maintains an Employer Resource Center Web 

site with information on best practices for hiring and retaining older 

workers, while a second also has resources available for its members on 

this topic. Another participant works with other human resource officials 

to locate work for older workers. In spite of these resources, one 

participant cautioned that it can be complex for retirees to be rehired and 

that some types of employers are not used to hiring retirees. 

Many participants look to their own retirees as a source of seasoned 

workers or knew of other employers who do so. One participant’s 

organization encourages and recruits retirees from positions at all levels to

come back and work for short stints. One benefit of this program is that it 

helps to retain institutional knowledge. A second participant agreed, 

saying its clients seek out their retirees for their organizational knowledge 

and expertise. Another participant knew of an employer that allows its 

retirees to come back after 6 months of retirement to take part-time jobs, 

whether it is to work for 1 week or 9 months. A fourth participant knew of

an employer with a program called “Reserves at the Ready,” which signs 

up its retirees for availability for specific short-term assignments. 

Participants agreed that flexible work situations were crucial to attracting 

and retaining older workers. For example, one participant said it is 

important for employers to be creative in terms of how they design jobs 

they are looking to fill, and to allow for flexible work locations away from 

Flexible Schedules and 

Workplaces Needed to Attract 

and Retain Older Workers 

Page 10 GAO-07-438SP Older Workers Forum
the traditional office. Another participant stated that people in the health 

care industry over age 50 leave work for three key reasons: (1) elder care 

responsibilities, (2) physical constraints, and (3) desire to pursue other 

interests. To address these concerns, this employer allows employees to 

have 10 days to use for elder care, flexible work schedules, and for 

employees working at least 15 hours per week, benefits such as medical

benefits and tuition reimbursement. This employer alleviates the physical

burden of lifting through the use of patient-lifting teams and supports its 

employees’ desire to pursue outside interests by bringing outside experts 

in to speak on various topics such as art. The importance of flexible elder 

care policies was also raised by another participant, who noted that older 

female workers are more likely to use family medical leave for elder care. 

As a result, allowance for elder care is critical for retaining these older 

workers. Another participant’s organization highlights opportunities for 

workers to use flex-time, work part-time, and tele-work in job 

announcements. 

Further corroborating the need for flexibility, another participant noted 

that there is a whole portfolio of different work models that can help 

employers engage and retain older workers. For example, the private 

sector could emulate the emeritus status universities use for their retired 

faculty to offer opportunities for retirees to continue working. 

Adapting the way jobs are designed is also important for retaining older 

workers. One participant cited two examples of adaptive job design 

practices from a report on best practices. In the first example, a hospital 

installed hydraulic systems in all its beds so patients 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 as required by the old assembly line 

system. Another participant stated that the issue of workplace flexibility 

was common to both older workers and disabled workers, suggesting a 

need for more dialogue between the two groups. 

Adapting workers to fit new jobs is also an important but uncommon 

practice. One participant mentioned an organization that actively retrains

its older workers for new positions. For example, it will retrain staff from 

the legal department to work in sales or retrain a secretary to work as an 

assistant on a project. 

Participants also offered other suggestions for providing workplace 

flexibility. In order to retain older workers, two participants’ organizations 

Page 11 GAO-07-438SP Older Workers Forum
offer their “snow bird” employees flexible work locations. Under this 

program, workers can work for the same employer in different parts of the 

country, depending upon the season. Another participant’s organization 

uses its retirees as substitute teachers and temporary workers. These 

arrangements are typically flexible and allow older workers to make their 

own schedules. Finally, one participant suggested that employers think 

about flexibility in terms of shorter or longer phased retirement options in 

addition to schedules and workplaces. 

Many participants noted the importance of benefit packages in attracting 

and retaining older workers. Some participants were offering benefits to 

both full- and part-time workers along with additional benefits such as 

tuition reimbursement and employee discounts. One participant’s 

organization uses a combination of benefits including tuition assistance, 

performance bonuses, and financial literacy resources that it feels is 

effective in attracting older workers. However, not every employer can

offer full benefits to the older workers it tries to recruit. One participant 

mentioned an employer who cannot afford to offer older workers the same 

level of benefits as most of its full-time employees and, as a result, tends to 

hire older workers on a part-time rather than a full-time basis. 

Benefit Packages Help to 

Attract and Retain Older 

Workers 

Making pension systems more flexible is also a way to attract and retain 

older workers. One participant’s organization offers its employees a 

deferred retirement option plan that allows workers to retire and return to 

work after 1 month.3

 Another employer is considering making itself a more 

desirable workplace by 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.

 3

Deferred retirement option plans (DROP) are largely limited to the public sector. Under a

DROP plan, instead of paying a pension benefit directly to the participant, it is placed in a 

separate account in the individual’s name. This individual account is also invested so that

when the participant ceases employment and accepts retirement, he or she receives the 

accumulated account balance in addition to the ongoing pension benefit. DROPs allow a 

pension participant, generally for a fixed maximum period, to have his or her pension 

benefits start on a particular date even though he or she continues to work with the 

employer providing the pension. By allowing a pension participant to gain access to or be

credited with pension benefits while still working, DROPs remove a key incentive for older 

workers to retire. 

Page 12 GAO-07-438SP Older Workers Forum
As discussed previously, many participants were concerned that engaging 

and retaining older workers could increase their exposure to age 

discrimination litigation. To avoid such exposure, one participant said a 

consistent performance management system is essential for dealing with

all workers. Besides treating all employees in a fair and consistent manner, 

participants agreed it is also important to show older workers that they are

valued. One participant’s organization studied mature workers and found 

that they wanted to be recognized for their contributions, and to feel that 

they are making a difference. In addition to its companywide commitment 

to encouraging its employees to stay with them in their later years, this 

organization encourages its older workers to mentor school-age kids 

toward a career in this company’s industry. Another participant’s 

organization uses its retirees as mentors and as resources for teaching 

leadership courses. A third participant’s organization sponsors a program 

that brings together different generations of workers to help them better 

understand each other and work better together.

Consistent Performance 

Management and Placing High 

Value on Older Workers Are 

Needed to Avoid Litigation 

Issues 

Improving Employee 

Financial Literacy and 

Helping Employees Better 

Prepare for Retirement 

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

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

retirement security that may include working past the traditional 

retirement age. The shift from defined benefit plans to defined 

contribution plans also means that employees will have to improve their 

financial literacy if they hope to have a secure retirement. Proper 

preparation can help employees to achieve their retirement goals. 

Participants discussed the lessons learned concerning the need for 

financial literacy among employees. Many participants agreed that 

increasing financial literacy would help employees better prepare for 

retirement by giving them the tools to assess whether or not they have 

sufficient funds to achieve their retirement goals. One participant also 

noted that many employers have moved from defined benefit plans to 

defined contribution plans. This change has placed the burden of financial 

management on employees who may lack the financial literacy skills to 

effectively manage the investment of their pensions. However, it was 

further noted that financial literacy education alone is not going to help 

people who have insufficient resources to support themselves. Another 

participant said special attention needs to be paid to those groups that are 

disadvantaged. A third participant, whose group has promoted financial

literacy among its members, has found from experience that financial 

literacy alone has limited impact. They have found that automatic 

enrollment in retirement savings plans is more effective than financial 

literacy efforts at increasing savings. According to this participant, once 

Financial Literacy Is Crucial for 

Retirement Security 

Page 13 GAO-07-438SP Older Workers Forum
these savings plans are begun, it is also important to help people regularly 

manage and rebalance their investment portfolios. Another participant 

noted that automatic enrollment is particularly effective when the level of

contributions automatically increases over time. 

Educating workers about future health care costs is also part of financial

literacy. Participants said educating and encouraging workers to save to 

fund future health care and disease management is essential to retirement 

security. One participant said their organization has undertaken a few 

initiatives related to helping Medicare recipients become informed about 

the need for long-term care and options for financing long-term care. The 

initiatives exist because many people are under the false impression that 

Medicare pays for these expenses. 

Helping employees understand what they need to do to attain their 

retirement goals can help employees formulate their plans. One 

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

over 50 years old. The program teaches employees how to plan financially

for this next phase by learning such things as how to put together a budget 

for their retirement. The program also offers individual counseling to help

employees determine how much and how long they need to work to reach

their goals and allows program participants to determine what sort of 

flexibility they may need in terms of their continuing work arrangements. 

A panel of retirees then discusses with program participants the lessons 

they have learned about transitioning to retirement. Another participant’s

organization has developed retirement simulation models to help its 

employees plan for their financial future. 

Preparation Can Help 

Employees Reach Their 

Retirement Goals 

Participants suggested a number of strategies to encourage older workers 

to remain in the labor force and to encourage employers to engage and 

retain older workers. These strategies include creating a national 

campaign to promote employment opportunities, beginning a national 

discussion of the definition of “old,” increasing financial literacy, and 

creating a national clearinghouse of best practices. In addition, 

participants stated that the federal government should become a model 

employer in engaging and retaining older workers. 

Suggested Strategies 

Create a National 

Campaign to Promote 

Older Workers 

Participants generally agreed that what is needed is a change in the 

national mind-set about work at older ages. To that end, the idea of 

creating a national campaign to promote older workers was suggested. 

Such a campaign could highlight the different types of work older people 

Page 14 GAO-07-438SP Older Workers Forum
are engaged in, the positive attributes of older workers, and the business 

case, i.e., the benefits to employers, for engaging and retaining older 

workers. 

Many participants talked about the need to think differently about life at 

older ages. To change the “culture of retirement,” one participant 

suggested the need for a national discussion to reconsider what “old” is 

and what the new retirement age should be or whether there should be a 

“retirement age” at all. Another raised the question of what our national 

norm is on work and lifelong learning. 

Participants agreed that strategies that increase financial literacy may help

workers better plan for their futures and know when to retire. Participants

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

financial literacy, including teaching financial literacy as early as grade 

school, promoting the discussion of retirement planning much earlier in 

workers’ careers, and using faith-based organizations as a conduit for 

financial planning such as homeownership counseling. 

In addition to encouraging older workers to remain in the labor force, 

participants agreed that employers need information about the best 

practices in 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, benefit 

packages, and workplace flexibilities—such as part-time work, flexible 

hours, and phased retirement—used by some employers to attract and 

retain older workers. 

Begin a National 

Discussion to Change the 

“Culture of Retirement” 

Increase the Financial 

Literacy of Workers 

Establish a National 

Clearinghouse of Best 

Practices in Engaging and 

Retaining Older Workers 

Federal Government 

Should Be a Model

Employer and Provide 

Leadership

Participants discussed a number of ways that the federal government 

could be a leader on the issue of keeping older workers in the workforce. 

First, one participant noted that as an employer of millions, facing its own 

demographic wave, the federal government should be a role model for the 

nation in terms of how it engages and retains older workers. Second, it can 

be a key player in the kinds of public/private partnerships that would 

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

national clearinghouse discussed above. Another participant stated that 

the public sector in general has a role to play, in cooperation with the 

private sector, in helping displaced older workers who need new skills to 

remain in the workforce. And third, through specific legislation or 

Page 15 GAO-07-438SP Older Workers Forum
regulations that would increase flexibility for employers and employees, 

the federal government can help create new models of employment for 

older Americans. For example, one participant suggested offering tax 

credits to employers as a way to motivate them to hire older workers and 

to workers as a way to motivate them to work longer. Some participants 

discussed the need for safe harbors in the tax code and ERISA that would 

make it easier for people to return to work after retirement. Others 

suggested that age discrimination laws may have had some unintended 

consequences, such as creating disincentives for hiring older workers and 

preventing employers from taking inventive actions, and that these laws 

should be re-evaluated or amended to encourage employers to hire older 

workers rather than discourage them. 

Page 16 GAO-07-438SP Older Workers Forum
Appendix I: List of Participants

Page 17 GAO-07-438SP

Appendix I: List of Participants 

Comptroller General of the United States 

U.S. Government Accountability Office 

Moderator 

David M. Walker 

Participants 

President and Chief Executive Officer 

National Older Worker Career Center

Larry E. Anderson 

Martha C. Artiles Chief Diversity Officer 

Manpower Inc. 

Principal Director, Maturing Workforce Program and 

Research Director, The Conference Board 

Linda Barrington 

Special Assistant to the President for Economic Policy 

The White House 

Charles P. Blahous 

Director, Education, Workforce, and Income Security 

U.S. Government Accountability Office 

Barbara Bovbjerg 

Acting Assistant Secretary, Employee Benefits Security Administration 

U.S. Department of Labor 

Bradford P. Campbell 

Consultant, Aging Workforce 

Massachusetts Institute of Technology 

Barbara Peacock-Coady 

Senior Research Associate 

Employee Benefit Research Institute 

Craig Copeland 

Vice President, Retirement Policy 

American Benefits Council 

Lynn Dudley 

Administrator of Office of Policy Development and Research, 

Employment and Training Administration 

U.S. Department of Labor 

Maria Kniesler Flynn 

Vice President, Human Resources 

Hoffmann-La Roche, Inc. 

Steve Grossman 

 Older Workers Forum
Appendix I: List of Participants

President and Chief Executive Officer 

National Caucus and Center on Black Aged, Inc.

Karyne Jones 

Director, Office of Policy 

Centers for Medicare and Medicaid Services 

Carol A. Kelly 

Associate Director, Strategic Human Resource Policy Division 

U.S. Office of Personnel Management 

Nancy H. Kichak 

Director of Workforce & Education Programs 

U.S. Chamber of Commerce, Institute for a Competitive Workforce 

Jan Magill

Administrative Director, Work and Family Services 

Bon Secours Richmond Health System 

Dawn Malone 

President and Chief Executive Officer 

Society for Human Resource Management 

Susan R. Meisinger 

Commissioner, Tax Exempt and Government Entities Division 

U.S. Internal Revenue Service 

Steven T. Miller 

Vice President 

UnumProvident Corporation 

Kenneth Mitchell 

Director, Education, Workforce, and Income Security 

U.S. Government Accountability Office 

Sigurd Nilsen 

Fellow 

Aspen Institute, Initiative on Financial Security 

Pamela Perun 

Workforce Issue Specialist, Department of Legislation 

AFL-CIO 

Jane McDonald-Pines 

President 

Anna Rappaport Consulting 

Anna M. Rappaport 

Benefits Tax Counsel, Office of Tax Policy 

U.S. Department of the Treasury 

W. Thomas Reeder 

Director, Workforce Issues 

AARP 

Deborah Russell 

Page 18 GAO-07-438SP Older Workers Forum
Appendix I: List of Participants

Director of Compensation and Benefits 

Brevard County School Board 

Susan G. Standley 

Senior Director of Staffing 

The Home Depot 

Marlon Sullivan 

Associate Commissioner, Office of Employment Support Programs 

U.S. Social Security Administration 

Sue Suter 

President 

The ERISA Industry Committee 

Mark J. Ugoretz 

Director of Government Programs 

CVS Corporation 

Stephen M. Wing 

Page 19 GAO-07-438SP Older Workers Forum
Appendix II: Agenda

Page 20 GAO-07-438SP

Appendix II: Agenda 

8:30 a.m. Check-in 

Opening session 

Welcome and introductions 

Setting the stage—presentation by the Comptroller General 

9:00 a.m. 

Session I: Key Obstacles 

Presentation of presurvey results regarding the obstacles facing older 

workers and their employers, including a discussion of the types of jobs 

available to older workers and the pay and benefits associated with them. 

9:45 a.m. 

10:45 a.m. Coffee Break 

Session II: Best Practices and Lessons Learned 

Discuss activities or programs now in place to help older workers to work 

longer and better prepare for retirement. We will hear from participants 

about employment best practices and lessons learned regarding topics 

such as recruitment, retention, rehiring, workplace flexibility, training, 

financial planning, health benefits, pension plans, and phased retirement 

for both lower-skilled and higher-skilled jobs and workers. 

11:00 a.m. 

11:50 p.m. Lunch will be distributed and Session II continues 

12:30 p.m. Break 

Session III: Strategies

1. What can government do to encourage more organizations/people to 

implement these types of activities on a large scale? 

2. On what topics should GAO focus its work to help facilitate these 

solutions? 

3. What can employers do to retain or recruit workers who are near or past 

traditional retirement age among a variety of industries and skill levels? 

4. What can employee groups do to facilitate work for those who wish to

work longer? 

12:45 p.m. 

1:45 p.m. Wrapup 

2:00 p.m. Adjournment 

 Older Workers Forum
Related GAO Products 

Page 21 GAO-07-438SP

Related GAO Products 

Human Capital: Retirements and Anticipated New Reactor Applications 

Will Challenge NRC’s Workforce, GAO-07-105. Washington, D.C.: January 

17, 2007. 

Senior Community Service Employment Program: Labor Has Made 

Progress Implementing Older Americans Act Amendments of 2000, but

Challenges Remain, GAO-06-549T. Washington, D.C.: April 6, 2006. 

Older Workers: Labor Can Help Employers and Employees Plan Better 

for the Future, GAO-06-80. Washington, D.C.: December 5, 2005. 

Private Pensions: Information on Cash Balance Pension Plans, 

GAO-06-42. Washington, D.C.: November 3, 2005.

Social Security: Societal Changes Add Challenges to Program 

Protections, GAO-05-706T. Washington, D.C.: May 17, 2005. 

Redefining Retirement: Options for Older Americans, GAO-05-620T. 

Washington, D.C.: April 27, 2005. 

21st Century Challenges: Re-examining the Base of the Federal 

Government, GAO-05-325SP. Washington, D.C.: February 2005. 

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. 

Older Workers: Policies of Other Nations to Increase Labor Force 

Participation, GAO-03-307. Washington, D.C.: February 13, 2003. 

Older Workers: Employment Assistance Focuses on Subsidized Jobs and 

Job Search, but Revised Performance Measures Could Improve Access to 

Other Services, GAO-03-350. Washington, D.C.: January 24, 2003. 

Older Workers: Demographic Trends Pose Challenges for Employers and 

Workers, GAO-02-85. Washington, D.C.: November 16, 2001. 

Private Health Insurance: Declining Employer Coverage May Affect 

Access for 55- to 64-Year-Olds, GAO/HEHS-98-133. Washington, D.C.: 

June 1, 1998.

Retiree Health Insurance: Erosion in Employer-Based Health Benefits

for Early Retirees, GAO/HEHS-97-150. Washington, D.C.: July 11, 1997. 

(130547) Older Workers Forum
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