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CCH® PENSION — 11/09/06

Most Employers Unprepared For Baby Boomer Retirements

Although two-thirds of companies expect baby boomer retirements to have a measurable impact on their organizations, more than three-fourths of employers have not yet started planning to deal with how this issue will affect them, according to ClearRock, an executive coaching and outplacement firm headquartered in Boston.

Almost half of companies (46%) would like at least 25% of their baby boomers to continue working past retirement age, but only about one-third (36%) expect to keep that many on their payrolls, according to the survey of about 100 organizations. The top strategies companies will use to retain at least some baby boomers past retirement age are through flexible hours and schedules, part-time positions, and telecommuting.

“There is a disconnect between how many organizations want baby boomers to work past anticipated retirement ages, and how many really expect them to continue on their payrolls,” said Annie Stevens, managing partner for ClearRock.

“Flexible working arrangements may not be sufficient to keep as many baby boomers on board as companies would like, and monetary inducements, such as bonuses or enhanced pension formulas, may be required to fill this gap,” added Greg Gostanian, managing partner for ClearRock.

Beginning in 2006, every day marks the 60th birthday of one or more of the nation’s 78 million baby boomers. The jobs that will be most affected by baby boomer retirements are: airline pilots, management analysts, teachers/special education, photographers, teacher’s aides, industrial engineers, social workers, HR professionals, postal workers, and police, according to the Bureau of Labor Statistics. In September, the Conference on Aging made 50 recommendations for dealing with these retirements.

According to the ClearRock survey results, almost two-thirds of organizations (64%) expect baby boomer retirements to have a measurable effect on their organizations, and more than three-fourths (77%) have not started planning to deal with the retirements. Furthermore, 59% of organizations expect baby boomers to begin to retire on or before age 62.

The survey revealed the top methods that organizations are planning to implement to try to retain baby boomers on their payrolls past retirement age. Those methods include: flexible hours and schedules (79%); part-time positions (67%); telecommuting (53%); boomers serving as mentors (18%); stay bonuses (5%); and enhanced pension formulas (5%).

For more information, visit http://www.clearrock.com.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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