And for many Canadians it's just that. Current trends and circumstances, however, suggest that a phased-in approach to retirement may deserve more consideration. A recent report commissioned by Human Resources Development Canada and prepared by human resources specialists William M. Mercer Limited examines issues surrounding phased-in retirement. Flexible Pension Design Phased-in retirement starts with a joint decision by employer and employee to reduce the employee's total hours of work over a period of time as the worker moves toward a full and complete retirement. Today's pension plan environment already provides limited opportunities for certain workers to phase-in their retirement.
Many trends point to the benefits of phased-in retirement.
A recent report by the Organization for Economic Co-operation and Development underscores the future fiscal unsustainability of rising social security costs. This could be done by encouraging workers to stay in the work force longer via phased-in retirement. From a practical perspective, individuals who begin paid employment later in life, or who interrupt employment due to education or family care needs, for example, may either want or need to remain working longer. This growing legion of workers probably requires a set of more flexible pension plan rules that will not unduly penalize them for having followed non-traditional career paths. Employers can reduce payroll costs by implementing phased-in retirement.