PLANSPONSOR - February - March 2022 - 28

PARTICIPANTS SPECIAL ISSUE | PHASED RETIREMENT
approaches (55%) vs. formal arrangements
(9%).
Benefits Considerations
Employers must also decide what benefits
they will provide to phased-program
participants. For example, from the nearretiree's
perspective, the continued availability
of employer-subsidized, group-rate
health insurance could be the deciding
factor in whether to phase into retirement.
Before the level of compensation
comes into play, employers need to understand
which benefits can adapt to a phased
retirement and which cannot, Papaz says.
For example, eligibility in a defined contribution
plan must be formulaic, whereas
nonqualified plans are almost solely at the
discretion of the employer.
" Some options and decisions for the
company are dictated by employment
status, " Papaz observes. " Retirement
plan eligibility, some health-care plans
and other fringe benefits may require
full-time employee status, which is more
likely earlier in the phased retirement
than later. Employers can offer extra cash
compensation to cover some of that, but it
is something they must consider. "
The benefits package can include
nonfinancial offerings. Graves cites
flexible work arrangements that let older
workers step down from managerial roles
into individual contributor roles, or shift
to part-time or part-year opportunities.
Offering them ancillary services such
as life coaches, support groups, legal
services and financial planning can also
help older workers prepare for retirement
during the phasing years.
Regardless of whether a company
adopts an informal or formal approach,
creating a strategic plan for the program
is a sound starting place, Hoeck says.
" This approach ensures you are tackling
the right problems, using thoughtful solutions,
establishing a benchmark against
which to assess progress and continuously
evolving along with your workforce, " she
says. -Ed McCarthy
28 PLANSPONSOR.COM February - March 2022
Retirement Styles
How Much Do You Agree With the Following?
n Millennials n Generation X n Baby Boomers
If I reduce my work hours, I should be paid
the same hourly rate for hours worked
If I take a lesser job, I should be paid the
market rate, even if that reduces my pay
If I shift to part-time, I should still receive
full-time employee benefits
75%
80%
83%
71%
77%
76%
62%
62%
55%
How Do You Envision Transitioning Into Retirement?
n Millennials n Generation X n Baby Boomers
Remaining in my current or a similar job
until I can't work anymore
Reducing my work hours gradually,
to add leisure time for enjoying life
Working in a capacity that's less demanding
and/or brings greater personal satisfaction
Stop working once I reach a set age,
to pursue retirement dreams
Stop working once I save a set sum of
money, to pursue retirement dreams
Not sure
23%
26%
21%
29%
26%
29%
19%
17%
14%
11%
11%
18%
10%
7%
6%
8%
13%
11%
Source: Transamerica Center for Retirement Studies, " Retirement Security Amid
COVID-19: The Outlook of Three Generations "
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