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Carrots to keep boomers working

By Jennie L. Phipps ·
Sunday, April 13, 2014
Posted: 8 am ET

In the state of Missouri, where Angela Curl is an assistant professor at the University of Missouri School of Social Work, more than 25 percent of all active state employees will be eligible to retire by 2016.

To keep all these boomers in Missouri, and elsewhere, from rushing for the exits all at once, leaving the state government workforces short on experience and institutional memory, Curl has been studying ideas that could encourage at least some older workers to delay their retirement.

Curl says that some of the best incentives don't cost a lot of money. They are interesting job challenges, recognition for jobs well done, supportive bosses, flexibility in scheduling and an ongoing feeling of being valued. All are  factors that combine to encourage good workers to delay their retirement planning, but they are difficult to mandate.

Money is another attractive incentive, but business and government economics are such that it's hard to justify spending on anything where the value is difficult for legislators and voters to understand.

The State of Missouri, Curl says, actually came up with an innovative plan to keep older workers on the job, and it works, but it has been discontinued for new employees because many people thought it was costing too much money. "It is perceived as expensive, even though it isn't," Curl says.

The plan, known as Deferred Retirement Option Provision or BACKDrop, works like this: Workers with a combination of age and service that adds up to 80 years are eligible to retire. If they elect BackDROP, they continue to work and get paid their regular salaries for up to 10 years. When they finally leave, they would get a lump sum payment of 90 percent of the retirement pay that they missed by working longer. The program works with no extra cost to the state if you assume that the older workers would have retired and collected their pensions anyway, and their jobs would have been filled by someone else who also would have collected a paycheck.

Some people complained that this plan doesn't distinguish between competent workers who should be encouraged to hang around and incompetent ones who should be shown the door. Curl says weeding out poor performers isn't a legitimate function of this kind of plan. "Hopefully, by virtue of performance review, people who aren't competent already have been let go," she says.

Curl says that, in fact, this program has been successful at encouraging some particularly skilled workers who had planned to leave government jobs in favor of a higher-paying private-sector second career to stay longer.

"There are lots of incentives in the system that encourage state workers to leave, including politics, cutbacks and outright financial encouragement. This is one that actually works to keep good people on the job," she says.

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