You are here: Home Knowledge Base Society Financing Old Age Solutions Encourage employers to employ and retain elderly workers by removing financial disincentives, such as seniority remuneration schemes and higher employment protection; by applying more flexible working conditions for elderly workers; ...
Symposium 2010

Solution for Financing Old Age

The Challenge

People are living longer, more active and more fulfilling lives. But those additional years mean additional costs as pensions are drawn for longer periods and the costs of surgery, medication, healt ...

People are living longer, more active and more fulfilling lives. But those additional years mean additional costs as pensions are drawn for longer periods and the costs of surgery, medication, healthcare and nursing care continue to soar. So the flipside of the scientific triumph over illness and disease is that many people do not have adequate financial resources to support their longer lives with the desired level of comfort.

Encourage employers to employ and retain elderly workers by removing financial disincentives, such as seniority remuneration schemes and higher employment protection; by applying more flexible working conditions for elderly workers; and by improving workers’ employability by encouraging job training and skill enhancement throughout their working lives.

The ability of the elderly to find or retain jobs is stifled by a number of barriers. Financial disincentives for employers to hire or retain older workers, such as systems of seniority remuneration or higher employment protection for older workers, should be removed.

Governments, employers and individuals should invest more in skills development to enable greater career mobility later in life. To remain productive and competitive in today’s labor markets, workers need to enhance and broaden their skills continuously. Sometimes it may even be appropriate for workers in the middle of their working lives to invest in a whole new second career. Workers’ incentives to enhance their skills and invest in their employability, possibly in a new occupation and a new firm, should therefore be strengthened.

To sustain the productivity of older workers, employers should be encouraged to create an appropriate working environment or use more flexible working conditions, including flexible rostering patterns, work schedules and part-time work, to react to potentially reduced physical or mental capacities. Where necessary, employers should adapt their workplaces to provide physical machinery or equipment that is more appropriate for older workers.

Employers should also recognize the embedded value within older workers and exploit their social capital by placing them in advisory or consultancy roles within their organizations. Older workers may need to “downshift”— taking on roles with lesser responsibilities—in later life; these roles will often command a lower salary than previous roles.

Pension providers and others should be aware that older workers may feel more comfortable moving to other employers if they are downshifting and should make their pension schemes flexible enough to accommodate this. They should also adapt pension schemes, especially final salary schemes, to minimize any negative financial impact from downshifting.

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