From the U.S. Government Accountability Office, www.gao.gov Transcript for: Phased Retirement Programs Description: GAO examined phased retirement programs in other countries to see if it could inform policy makers here in the U.S. Related GAO Work: GAO-19-16: Older Workers: Other Countries' Experiences with Phased Retirement Released: April 2019 [ Background Music ] [ Charlie Jeszeck: ] Phased retirement has the potential to provide a lot of real benefits, both for workers, employers, and the country, as a whole, in the United States. [ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Matt Oldham. Phased retirement programs are arrangements that allow workers to reduce their working hours as they transition into retirement. This can have the added benefit of helping to sustain national pension systems, similar to the Social Security Program and to help with potential shortages of skilled people in the workforce. I'm with Charlie Jeszeck, an Education Workforce and Income Security director at GAO. And he led a report looking at how other countries handle phased retirement arrangements. Thank you for joining me, Charlie. [ Charlie Jeszeck: ] Oh, thank you. [ Matt Oldham: ] So, what does phased retirement look like in the United States? [ Charlie Jeszeck: ] Well, right now, phased retirement is not really widespread within the United States. They are concentrated in a few industries, for example, higher education, healthcare, they're fairly common. Other areas, you don't see them as much. However, a major effort was at the end of the Obama administration required every federal agency to negotiate a phased retirement program with their workforces. And so, agencies are doing that and so the entire federal government in the next few years will be have -- completely be covered by a phased retirement program. [ Matt Oldham: ] So, for this report, why did you look beyond our borders? [ Charlie Jeszeck: ] Well, one of the things is that phased retirement, the idea is the extent to which phased retirement can extend labor force participation and generally, if people work longer, that's going to be positive for their retirement, positive for Social Security. And so, other countries which have been aging more rapidly than the United States, we wanted to see how they were using phased retirement strategies to get those kinds of improvements. And so, we looked at four different countries, the United Kingdom, Canada, Sweden, and Germany. And we did find a number of programs that actually had some features that could inform the American experience. [ Matt Oldham: ] So, what were some of these differences? [ Charlie Jeszeck: ] Most of the countries in Europe, they have traditional pensions, the workers are covered by -- by collective bargaining agreements. And so, that's not really true for the vast majority of private sector American workers. Nevertheless, we saw some positive features. We saw situations where, of these programs being negotiated or being created in a non-union setting, being created in -- outside of a traditional pension but where people have 401K-type plans, where people can contribute -- continue to contribute to the plan as they're -- they're cutting down their workforce participation, or actually draw on their benefits a little sooner. Some of this is subsidized by the federal government in these countries but features where it would seem to -- possible to transfer some of them to the American workplace. [ Background Music ] [ Matt Oldham: ] So, it sounds like when you reviewed these other countries, you found examples of phased retirement programs or features of phased retirement programs that people are generally happy with. So, how is this information useful to policymakers here in the U.S.? [ Charlie Jeszeck: ] Well, I think some of the ideas of being able to, for example, to create a phased retirement program in the context where one is a 401K -tyle pension plan, as opposed to a traditional pension, or to how to set up these programs in an environment where you don't have a union, if it's a -- there is no collective bargaining going on. This helps employers in the U.S. to move in that direction. And while there still are some, you know, significant differences, for example, some discrimination laws, some of the bureaucratic things that could make it more difficult for American employers, these do appear to be examples of things that American employers could adopt that could work effectively in the United States. [ Matt Oldham: ] So, lastly, what do you believe is the bottom line of this report? [ Charlie Jeszeck: ] Well, the bottom line is, is that phased retirement, while it's still -- still evolving, has the potential to provide a lot of real benefits, both for -- for workers, employers, and the country, as a whole, in the United States. [ Matt Oldham: ] Charlie Jeszeck is an Education Workforce and Income Security director at GAO. And he was talking about his report on how a select group of countries handle phased retirement programs. Thank you for your time, Charlie. [ Charlie Jeszeck: ] Thank you. 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