Jorge Rodas, right, meets with his coworker, Yuri Casate. The two share job responsibilities at Southern California Gas Co. — Dave Lauridsen
En español | Phased retirement — a promising alternative for workers in the later stages of their careers — may soon get traction.
The program lets workers gradually start clocking shorter work weeks, allowing them to test out retirement to see if they like it or can afford it. They also get to maintain social ties in the workplace. Ideally, this option keeps them in the workforce longer and prevents them from tapping savings and Social Security early, bettering their chances of not outliving their money.
Making it a win-win
Now Uncle Sam has decided to put some skin in the game. Faced with the prospect that nearly one-third of its career employees will be eligible to retire in less than three years, the federal government is letting each agency decide whether to offer phased retirement. The program will be open to retirement-eligible employees — in some cases as early as age 55 — who will work half-time while receiving half their pension and full health benefits. Key to the program: Phased retirees must spend 20 percent of their time mentoring the next generation of federal workers.
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It's too early to know how many agencies will adopt it or how many workers will sign on, says Kenneth J. Zawodny Jr., associate director for retirement services at the Office of Personnel Management. Still, he says, "We hope it will be a model" for private employers.
Older workers will be watching. The idea of easing into retirement a year or more before exiting the workforce appeals to many of them. A 2013 AARP survey found that more than half of respondents describe the ideal job as one that offers this option.
Employers can reap benefits, too. Consider Southern California Gas Co., which employs more than 8,200 people. In 10 years, half of them will be eligible to retire, taking with them the experience of running the nation's largest natural gas distributor. Instead of watching knowledge walk out the door, the utility lets older workers scale back hours while maintaining full pay through part-time wages plus accrued vacation and sick leave. In turn, they mentor younger colleagues.
"It's been a win-win-win for us to keep these skilled workers here, to help transfer knowledge to younger, less experienced employees," says Hal Snyder, human resources vice president of diversity and inclusion. And for older employees who have been working decades, this lets them ease into retirement for a year or so rather than abruptly end their careers, he says.
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