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Testimony before the U.S. Senate Special Committee on Aging: 

United States Government Accountability Office: 


For Release on Delivery Expected at 10:30 a.m. EST: 

Wednesday, February 28, 2007: 

Older Workers: 

Some Best Practices and Strategies for Engaging and Retaining Older 

Statement of David M. Walker: 
Comptroller General of the United States: 


GAO Highlights: 

Highlights of GAO-07-433T, a testimony before the U.S. Senate Special 
Committee on Aging 

Why GAO Did This Study: 

More Americans remaining in the workforce at older ages could lead to 
benefits at several levels. First, working longer will allow older 
workers to bolster their retirement savings. Second, hiring and 
retaining older workers will help employers deal with projected labor 
shortages. Third, older workers will contribute to economic growth and 
increase federal revenues, helping to defray some of the anticipated 
costs associated with increased claims on Social Security and Medicare. 

Despite all of these gains to be had, there are barriers to continued 
employment for older workers. In addition, some employers remain 
reluctant to engage and retain this group. It is in the nation’s 
interest for people to work longer, which requires that barriers to 
continued work be removed sooner rather than later. 

This testimony highlights issues discussed at a recent forum GAO 
convened on engaging and retaining older workers, as well as prior GAO 
work. Forum participants included experts representing employers, 
business and union groups, advocates, researchers, actuaries, and 
federal agencies. These highlights do not necessarily represent the 
views of any one participant or the organizations that these 
participants represent, including GAO. 

What GAO Found: 

Obstacles continue to exist for older workers seeking continued or new 
employment and for employers who want to attract or retain older 
workers. The following obstacles, best practices, lessons learned, and 
strategies to address some of these obstacles and promote work at older 
ages were discussed at a recent GAO forum on older workers. 
Key Obstacles:
* Some employers’ perceptions about the cost of hiring and retaining 
older workers are a key obstacle in older workers’ continued 
* Workplace age discrimination, the lack of suitable job opportunities, 
layoffs due to changes in the economy, as well as the need to keep 
skills up to date, are all challenges facing older workers.
* Strong financial incentives for workers to retire as soon as possible 
and some jobs that are physically demanding or have inflexible 
schedules provide strong disincentives to continued work. 
Best Practices and Lessons Learned:
* Use nontraditional recruiting techniques such as partnerships with 
national organizations that focus on older Americans.
* Employ flexible work situations and adapt job designs to meet the 
preferences and physical constraints of older workers.
* Offer the right mix of benefits and incentives to attract older 
workers such as tuition assistance, time off for elder care, employee 
discounts, and pension plans that allow retirees to return to work.
* Provide employees with financial literacy skills to ensure they have 
a realistic plan to provide for retirement security.
* Treat all employees in a fair and consistent manner and employ a 
consistent performance management system to prevent age discrimination 
* Conduct a national campaign to help change the national mindset about 
work at older ages. 
* Hold a national discussion about what “old” is to help change the 
culture of retirement.
* Create a clearinghouse of best recruiting, hiring, and retention 
practices for older workers. 
* Strengthen financial literacy education to help workers prepare to 
* Make the federal government a model employer for the nation in how it 
recruits and retains older workers. 
* Create a key federal role in partnerships to implement these 
* Consider specific legislation or regulations to increase flexibility 
for employers and employees to create new employment models. 


To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Barbara Bovbjerg at (202) 
512-7215 or 

[End of section] 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss how providing additional 
opportunities and incentives for older workers to continue to 
contribute their considerable skills and knowledge is vitally important 
to the well-being of both such individuals and our national economy. By 
the way, while some people talk about "older workers," I prefer to use 
the term "seasoned workers" to reflect the skills and knowledge that 
these workers have. But whatever term we use, more Americans remaining 
in the workforce at older ages could lead to benefits at several 
levels. First, working longer will allow older workers, many of whom 
are not adequately prepared for retirement, to bolster their retirement 
savings. Second, hiring and retaining older workers will help employers 
deal with projected labor shortages in the future. Third, older workers 
will contribute to economic growth and increase federal revenues, 
helping to defray some of the anticipated costs associated with 
increased claims on Social Security and Medicare. Fourth, several 
studies show that the longer persons remain mentally and physically 
active, the longer they are likely to live. 

Despite all of these gains to be had, there are barriers to continued 
employment for older workers. In addition, some employers remain 
reluctant to engage and retain this group. While many, including GAO, 
have reported on the benefits associated with work later in life, not 
enough has been done to address this issue. Many employers are still 
unaware of the need to engage older workers to meet their workforce 
needs, and few have implemented programs to engage or retain older 
workers. Similarly, many workers are not adequately preparing for 

The number of older workers is potentially large and is a growing part 
of the population. They represent a large and underutilized national 
resource with the potential to improve the economic well-being of 
themselves and the nation. At the same time, we must also consider 
those who cannot work longer due to health limitations or disability 
and make proper accommodations for them. 

Because of your continuing interest in older workers, today I will 
present the results of a recent forum on older workers, which I 
convened on December 5, 2006, as well as discuss some of our prior work 
on this topic.[Footnote 1] At this forum, we brought together a diverse 
array of experts, including some employers from AARP's "Best Employers 
for Workers Over 50" program; representatives from business and union 
groups, and federal agencies; along with advocates, researchers, 
actuaries, and academics, to address issues related to engaging and 
retaining older workers. Specifically, the forum participants discussed 
(1) obstacles that older workers encounter when seeking continued work, 
(2) best practices for hiring and retaining older workers, and (3) 
general strategies to promote opportunities for older workers. The 
highlights summarized here do not necessarily represent the views of 
any individual participant or the organizations that these participants 
represent, including GAO. 

This forum is the latest in a series that GAO has held in recent years. 
The purpose of these forums is to bring together key stakeholders from 
diverse groups to discuss emerging issues with the hope of identifying 
areas of agreement. Such gatherings can serve as a catalyst for future 
actions, both individually and collectively, on the issue being 
discussed. For example, the Fiscal Wake Up Tour, a joint endeavor of 
GAO, the Concord Coalition, the Brookings Institution, and the Heritage 
Foundation, grew out of a forum on fiscal responsibility held in 2005 
and is currently visiting cities around the nation to promote fiscal 
awareness.[Footnote 2] In another example, a consortium of not-for- 
profit, private, and public sector efforts, known as the Key National 
Indicators Initiative, emerged from a forum on national indicators that 
GAO hosted and co-sponsored with the National Academies in 
2003.[Footnote 3] 


The aging of the baby boom generation presents both a challenge and an 
opportunity for our nation. Our past work has highlighted the 
importance of engaging and retaining older workers, and also, 
unfortunately, how little has been done to reap the benefits of this 
large and growing national resource. We convened this forum to continue 
our efforts to address issues associated with the aging of the American 

Forum participants reported that obstacles to continued work at older 
ages remain, including employer perceptions regarding older workers, 
workers' perceptions regarding the benefits of working longer, and 
limited job opportunities for older workers. To surmount some of these 
obstacles, forum participants suggested a variety of best practices, 
including offering more flexible work arrangements and adapting job 
design to suit the needs of older workers. In addition, they said that 
the right mix of benefits and incentives was needed to attract older 
workers and that employees needed additional financial literacy skills 
to ensure they have a realistic plan for retirement security. 
Participants offered a variety of strategies to move forward on this 
issue. These included a national campaign to promote work at older ages 
in the hope of changing the national mind-set and to engage in a 
national discussion to reconsider what "old" is, how we should think 
about retirement, and whether there should even be a retirement age. 
Participants also suggested the establishment of a national 
clearinghouse of best practices for engaging and retaining older 
workers. Efforts to increase financial literacy may also help workers 
plan for their futures and learn more about the benefits of working 
longer. Finally, participants outlined several federal actions that 
could help with this issue, including for the federal government to act 
as a model employer of older workers and to consider specific 
legislation or regulations that would increase flexibility for 
employers and employees to create new employment models. 


In the 21st century, older Americans are expected to make up a larger 
share of the U.S. population, live longer, and spend more years in 
retirement than previous generations. The share of the U.S. population 
age 65 and older is projected to increase from 12.4 percent in 2000 to 
19.6 percent in 2030 and continue to grow through 2050. In part this is 
due to increases in life expectancy. The average number of years that 
men who reach age 65 are expected to live is projected to increase from 
just over 13 in 1970 to 17 by 2020. Women have experienced a similar 
rise--from 17 years in 1970 to a projected 20 years by 2020. While life 
expectancy has increased, labor force participation rates of older 
Americans only began to increase slightly in recent years. As a result, 
individuals are generally spending more years in retirement. In 
addition to these factors, fertility rates at about the replacement 
level are contributing to the increasing share of the elderly 
population and a slowing in the growth of the labor force. Also 
contributing to the slowing in the growth of the labor force is the 
leveling off of women's labor force participation rate. While women's 
share of the labor force increased dramatically between 1950 and 2000-
-from 30 percent to 47 percent--their share of the labor force is 
projected to remain at around 48 percent over the next 50 years. By 
2025 labor force growth is expected to be less than a fifth of what it 
is today. 

The aging of the baby boom generation, increased life expectancy, and 
fertility rates at about the replacement level are expected to 
significantly increase the elderly dependency ratio--the estimated 
number of people aged 65 and over in relation to the number of people 
of aged 15 to 64. In 1950, there was one person age 65 or over for 
every eight people aged 15 to 64. The ratio increased to one to five in 
2000 and is projected to further increase to one person aged 65 and 
over for every three people aged 15 to 64 by 2050. As a result, there 
will be fewer younger workers to support a growing number of Social 
Security and Medicare beneficiaries. 

The aging of the population also has potential implications for the 
nation's economy. If labor force growth continues to slow as projected, 
fewer workers will be available to produce goods and services. Without 
a major increase in productivity or higher than projected immigration, 
low labor force growth will lead to slower growth in the economy and 
slower growth of federal revenues. These circumstances in turn will 
accentuate the overall pressure on the federal budget, which will be 
encumbered with increased claims for benefits for seniors such as 
Medicare and Social Security, while relatively fewer workers are paying 
into the benefits systems. 

Figure 1: U.S. Elderly Dependency Ratio (Population age 65 and Older 
Relative to Age 15 to 64), 1950-2000 and Projected 2005-2050: 

[See PDF for image] 

Source: United Nations. 

Note: Population Division of the Department of Economic and Social 
Affairs of the United Nations Secretariat, World Population Prospects: 
The 2004 Revision and World Urbanization Prospects: The 2003 Revision. 
Data for 2005 through 2050 are projected. The elderly dependency ratio 
equals the number of people age 65 and older divided the number between 
age 15 and 64, expressed as a percentage. 

[End of figure] 

As Americans live longer and spend more years in retirement, several 
factors contribute to the growing insecurity of retirement income. With 
greater life expectancies, individuals need to finance more years of 
retirement; however, many workers claim their Social Security benefits 
prior to reaching the full retirement age, which results in lower 
monthly payments. Not only do individuals need to make their money last 
longer; they also bear greater risk and responsibility for their 
retirement savings than in the past. About half of U.S. workers do not 
have a pension plan through their employer, and those who do are less 
likely than in the past to be covered by defined benefit (DB) plans. 
The shift from traditional DB plans to defined contribution (DC) plans 
places greater responsibility on workers to make voluntary 
contributions and make prudent investment decisions. It also increases 
the importance of workers preserving such savings for retirement. 
Moreover, rising health care costs have also made health insurance and 
anticipated medical expenses increasingly important issues for older 
Americans. A long-term decline in the percentage of employers offering 
retiree health coverage has leveled off in recent years, but retirees 
face an increasing share of costs, eligibility restrictions, and 
benefit changes that contribute to an overall erosion in the value and 
availability of coverage. Finally, it is clear that Social Security, 
Medicare, and Medicaid are unsustainable in their present form. When 
the needed reforms to these programs are made, one result will be that 
millions of individuals will have to assume increased responsibility 
for their economic security in retirement. These trends suggest that 
more and more Americans will find they have inadequate resources to 
finance retirement. For many, continued work past traditional 
retirement age may be the solution. 

We, along with others, have highlighted the need to engage and retain 
older workers to address some of these challenges associated with an 
aging workforce. In 2001, we recommended that the Secretary of Labor 
form a broad interagency task force to develop regulatory and 
legislative proposals addressing the issues raised by the aging of the 
labor force and to serve as a clearinghouse of information about 
employer programs to extend the work life of older workers. After 
strong encouragement from this Committee, this task force, which 
includes representatives from the Departments of Labor (Labor), 
Commerce, and Education, along with the Social Security Administration, 
began meeting in 2006 and plans to focus on three areas: employer 
response to the aging of the workforce; individual opportunities for 
employment in later years; and legal and regulatory issues regarding 
work and retirement. The task force intends to release a report on its 
findings and strategies in summer 2007. In 2003, we recommended that 
Labor review the Workforce Investment Act performance measure regarding 
earnings to ensure that this measure does not provide a disincentive 
for serving employed workers, some of whom might be older 
workers.[Footnote 4] Labor has partially addressed this issue, but the 
potential for existing measures to have unintended consequences 
remains. In 2005, we held a series of focus groups with workers and 
retirees to better understand the factors that influence the timing of 
retirement. We found that health problems and layoffs were common 
reasons to retire and that few focus group members saw opportunities to 
gradually or partially retire. Workers also cited what they perceived 
as their own limited skills and employers' age discrimination as 
barriers to continued employment.[Footnote 5] As part of this work, we 
also participated in a roundtable discussion with employers to learn 
what they were doing to hire and retain older workers. While these 
employers generally agreed that flexibility was the key feature 
necessary to recruit and retain older workers, few of them had 
developed programs to put this belief into practice. 

Building on this body of work, we convened this forum on older workers 
to address these issues. 

Obstacles to Engaging and Retaining Older Workers: 

According to participants at our forum, some of the key obstacles that 
hinder continued work at older ages include: first, employer 
perceptions about the cost of employing older workers; second, employee 
perceptions about the costs and benefits of continued work; and third, 
changes in industry and job skill requirements, which may hinder older 
workers from remaining employed or finding suitable new employment. 

First, many employers cite both compensation--including the rising cost 
of health insurance--and training costs as obstacles to hiring and 
retaining older workers. In addition, forum participants reported that 
many employers have not learned to place a high value on their 
experienced workers, instead gearing their succession planning toward 
replacing older workers with younger ones. Forum participants also 
cited negative stereotypes surrounding older workers that include the 
belief that such workers produce lower-quality work than their younger 
counterparts, and less work overall. Also, many employers believe that 
older workers are resistant to change. Finally, but not least, it was 
suggested that some employers are hesitant to hire older workers for 
fear of age discrimination lawsuits. While many employers express an 
interest in recruiting older workers, our prior work has found that few 
develop programs to do so. 

At the same time that there is some resistance among employers to 
hiring older workers, there are also strong incentives for workers to 
retire. Participants noted that a "culture of retirement" exists in 
this country which encourages workers to claim retirement benefits and 
stop working as early as possible. The availability of Social Security 
at age 62 and high effective tax rates on earnings between age 62 and 
Social Security's full retirement age may discourage some workers from 
continuing to work once they start claiming benefits. Workers who 
receive Social Security benefits but have not yet reached the full 
retirement age will have their benefits reduced by one dollar for every 
two or three dollars that they earn above a set threshold due to the 
Social Security earnings test. As a result, workers who have claimed 
Social Security benefits at 62 may not feel that it is worthwhile to 
continue working. Also, the structure of traditional DB pension plans 
may encourage retirement because pension laws have prohibited working 
for the same employer while receiving benefits. While the Pension 
Protection Act of 2006 does contain a provision that allows plans the 
option of providing some benefits to participants who remain in the 
workforce at age 62 and beyond, it is too soon to determine what the 
impact of this policy change will be.[Footnote 6] In addition to these 
financial incentives, jobs that are physically demanding or have 
inflexible schedules that compete with family caregiving needs also 
provide strong disincentives to continued work. 

For some, the incentive to retire lies in the lack of suitable job 
opportunities. Some employers are reluctant to offer flexible work 
arrangements such as part-time work to existing employees. In addition, 
layoffs due to changes in the economy, along with the lack of skills 
needed to compete in the global economy, are also challenges facing 
older workers. Forum participants reported that employers who downsize 
may lay off older workers sooner than younger workers, in part because 
older industries tend to have a disproportionate number of older 
workers in their labor force. Positions of some low-skill older workers 
also may have been automated, eliminated, or outsourced. At the same 
time, displaced older workers may lack the necessary training to make a 
career change. Our past work has found that when older workers lose a 
job, they are less likely than younger workers to find other 
employment.[Footnote 7] 

Best Practices and Lessons Learned on Engaging and Retaining Older 

We, along with others, have previously reported on the importance of 
flexibility in recruiting and retaining older workers. In order to 
effectively engage older workers, forum participants suggested 
implementing new recruiting approaches, workplace flexibility, the 
right mix of benefits and incentives, financial literary education, and 
consistent performance management systems. Moreover, participants 
warned against designing a "one-size-fits-all" approach, noting the 
significant differences among employers and employees. 

New Approaches Being Used to Engage Older Workers: 

Employers have found innovative recruiting techniques to identify and 
recruit older workers. For example, some employers have established 
partnerships with national organizations, such as AARP, to help 
advertise themselves as employers of older workers. Other employers 
rehire their own retirees for specific needs, both short-term and long- 
term. For example, one employer actively retrains its employees for 
other distinct roles in the organization. 

Flexible Schedules and Workplaces Needed to Attract and Retain Older 

Labor force decisions of older workers are also influenced by the 
availability of flexible work arrangements. Full and complete 
withdrawals from the workforce are no longer as common as they once 
were, but rather workers are more likely to seek out phased retirement 
or bridge employment options. Employers who are creative in how they 
design jobs, and who allow for flexible work locations away from the 
traditional office, have an advantage in engaging older workers. One 
employer mentioned three reasons older workers retire: (1) elder care 
responsibilities, (2) physical constraints, and (3) a desire to pursue 
other interests. To address these concerns, this employer provides 
workers 10 days off each year for elder care, and flexible work 
schedules. Two employers have a "snow bird" program, which allows 
employees who live in different places during the year to work in both 
locations. Other employers have adapted job designs to accommodate the 
physical constraints of older workers. One participant mentioned a 
hospital that installed hydraulic systems in all of its beds so the 
beds could fold into a sitting posture, a change that assisted older 
staff in moving patients. In the second example, an employer modified 
an assembly line so that cars on the line could be rotated to grant 
easier access for mechanics who were unable to lie down to work on 

Benefit Packages Help to Attract and Retain Older Workers: 

Benefit packages that complement some of these new work arrangements 
are also important in attracting and retaining older workers. Some 
forum participants' organizations offer benefits to both full-and part- 
time workers. One employer offers medical benefits and tuition 
reimbursement for employees working at least 15 hours per week, while 
another offers employee discounts. 

Modifying pension plans can also entice workers to work longer. One 
participant's organization offers its employees the opportunity to 
retire and return to work after 1 month while still collecting pension 
benefits.[Footnote 8] Another employer is considering matching a 
greater percentage of older workers' DC plan contributions, thereby 
appealing to older workers who may not have been with the company for a 
very long time. However, not every employer can offer such a portfolio 
of benefits for older workers who work part-time, due to the costs. 

Improving Employee Financial Literacy and Helping Employees Better 
Prepare for Retirement: 

With older Americans living longer and spending more time in 
retirement, workers will have to ensure they have a realistic plan to 
provide for retirement security that may include working longer. 
Increasing financial literacy can help workers better prepare for 
retirement by giving them the tools to assess whether or not they have 
sufficient funds to retire at a particular age. With DC pension plans 
becoming more common, the burden of financial management on employees 
is growing, thereby increasing the importance of financial literacy. To 
address this issue, one forum participant's employer offers a 
retirement-planning program for employees over 50 years old that 
includes individual counseling services. Another participant mentioned 
automatic enrollment in retirement savings plans as an effective way to 
help employees save for retirement, while also noting that employees 
need ongoing education to ensure their portfolios remain balanced. Such 
education should not be limited to only pension plans, as participants 
highlighted the need to plan for future health care costs as well. 

To limit exposure to age discrimination litigation, one participant 
said a consistent performance management system is essential for 
dealing with all workers. Besides saying that all employees should be 
treated in a fair and consistent manner, participants agreed it is also 
important to show older workers that they are valued. 

Finally, when discussing best practices, forum participants cautioned 
against designing solutions with a "one-size-fits-all" approach due to 
the variety of employers' needs and workers' knowledge, skills, and 

Suggested Strategies for Policymakers and Employers: 

Given the scope and importance of this issue, participants offered a 
number of strategies to encourage older workers to remain in the labor 
force and to encourage employers to engage and retain older workers. 
They generally agreed that a change was needed in the national mind-set 
about work at older ages and that a national campaign to promote this 
concept was needed. Such a campaign could highlight the different types 
of work older people are engaged in, the positive attributes of older 
workers, and the benefits to employers of engaging and retaining older 
workers. To change the "culture of retirement" that currently exists, 
one participant suggested the need for a national discussion to 
reconsider what "old" is, and how we should think about retirement, or 
if there should even be a retirement age. 

Participants also agreed that employers need information about the best 
practices for engaging and retaining older workers. One strategy 
discussed was the establishment of a national clearinghouse of best 
practices, such as the different kinds of work structures, recruiting 
techniques, and workplace flexibilities used by some employers to 
attract and retain older workers. 

Participants agreed that strategies that increase financial literacy 
may help workers better plan for their futures and learn more about the 
benefits of working longer. Although this is a long-term endeavor, 
participants suggested that both public and private efforts may be 
needed to promote financial literacy, including incorporating financial 
literacy into the grade school curriculum, promoting the discussion of 
retirement planning much earlier in workers' careers, and using faith- 
based organizations as a conduit for financial planning. 

Finally, participants discussed a number of ways that the federal 
government could be a leader in encouraging older workers to remain in 
the workforce. First, as an employer of millions facing the impending 
retirement of many of its workers, the federal government should "lead 
by example" and be a role model in how it engages and retains older 
workers. Second, it can help to foster the kinds of public/private 
partnerships that would promote the national campaign, begin a national 
discussion, or contribute to the national clearinghouse discussed 
above. In addition, the public sector, in cooperation with the private 
sector, can help displaced older workers who need new skills to remain 
in the workforce. And third, through specific legislation or 
regulations that would increase flexibility for employers and 
employees, the federal government can help create new models of 
employment for older Americans. For example, some participants 
discussed the need for safe harbors in the tax code and the Employee 
Retirement Income Security Act that would make it easier for people to 
return to work after retirement and still collect their pensions. The 
related provision in the Pension Protection Act, which affords some 
flexibility in this area, represents a step in the right direction. 
Another participant suggested that age discrimination laws may have had 
some unintended consequences, and that these laws should be reevaluated 
or amended to provide safe harbors that would encourage employers to 
hire older workers. 


Engaging and retaining older workers is critical for promoting economic 
growth, improving federal finances, and shoring up retirees' income 
security. Given the right mix of incentives, programs, and job designs, 
we have an opportunity today to support those who wish to work later in 
life, thereby reinventing the traditional concept of retirement, 
helping to bolster individuals' retirement security, and fostering 
economic growth. With the oldest members of the baby boom generation 
eligible to begin collecting early Social Security benefits next year, 
time is running out to seize this opportunity. We convened this forum 
because of the importance of engaging and retaining older workers, and 
we congratulate this Committee for its sustained leadership on this 

Given existing trends in the aging of baby boomers, pressures on 
federal entitlement programs, and threats to individuals' retirement 
security, it is in the nation's interest for people to work longer. 
Harnessing the benefits of this growing group of potential older 
workers requires that barriers to continued work be removed sooner 
rather than later. At the same time, it is important to acknowledge 
that not everyone can work at older ages, and proper accommodations are 
needed for such persons as well. 

Despite evidence indicating the future importance of older Americans to 
the workforce, barriers and perceptions continue to get in the way of 
making progress. Forum participants generally agreed that employers do 
not place a high enough value on experienced workers, and that suitable 
job opportunities are lacking for older workers. These findings echo 
many of those that we heard in our 2005 focus groups and reiterate 
findings from our 2001 report. While some progress is being made, in 
the absence of additional change, we risk a missed opportunity to 
engage those workers who wish to remain in the workforce longer. 

At our forum, there was a good deal of enthusiasm among participants to 
confront this issue, and I hope that by sharing some best practices and 
suggested strategies today progress will continue with renewed insight 
and energy. At the same time, given the national scope of the 
challenge, addressing it will require not only workers and employers. 
Clearly, there is also a role for government to play, whether it be 
through becoming a model employer of older federal employees or helping 
to foster flexible work arrangements in the private sector to meet the 
needs of older workers, or by considering legislative and regulatory 
changes, including those that Labor's interagency task force may 
propose. Finally, consideration of the current mix of federal policies-
-including Social Security, Medicare, and pension laws--may be 
warranted to ensure that their incentives are appropriate given future 
demographic changes and the benefits that can be gained from work at 
later years for both individuals and the nation. 

Mr. Chairman, this concludes my remarks. I would be happy to answer any 
questions you or the other members of the Committee may have. I am 
pleased by your continued interest in this area and look forward to 
working with you on this issue in the future. 

Contact and Staff Acknowledgments: 

For questions regarding this testimony, please call Barbara Bovbjerg, 
Director at 202-512-7215. Other individuals making key contributions to 
this statement included Mindy Bowman, Alicia Puente Cackley, Jennifer 
Cook, Scott Heacock, and Kevin Kumanga. 


[1] The summary report of the forum is being released today as well. 
GAO, Highlights of a GAO Forum: Engaging and Retaining Older Workers, 
GAO-07-438SP (Washington, D.C.: Feb. 28, 2007). For further information 
on older worker issues, please see the following reports and 
testimonies: GAO, Highlights of a GAO Forum: Workforce Challenges and 
Opportunities for the 21st Century: Changing Labor Force Dynamics and 
the Role of Government Policies, GAO-04-845SP (Washington, D.C.: June 
2004); GAO, Older Workers: Demographic Trends Pose Challenges for 
Employers and Workers, GAO-02-85 (Washington, D.C.: November 2001); 
GAO, Redefining Retirement: Options for Older Americans, GAO-05-620T 
(Washington, D.C.: Apr. 27, 2005); GAO, Older Workers: Labor Can Help 
Employers and Employees Plan Better for the Future, GAO-06-80 
(Washington, D.C.: Dec. 5, 2005); and GAO, Older Workers: Policies of 
Other Nations to Increase Labor Force Participation, GAO-03-307 
(Washington, D.C.: Feb. 13, 2003). 

[2] GAO, Highlights of a GAO Forum: The Long-Term Fiscal Challenge, GAO-
05-282SP (Washington, D.C.: Feb. 2005). For more information on the 
tour, see, 

[3] GAO, Forum on Key National Indicators: Assessing the Nation's 
Position and Progress, GAO-03-672SP (Washington, D.C.: May 2003). For 
more information, see 

[4] GAO, Workforce Training: Employed Worker Programs Focus on Business 
Needs, but Revised Performance Measures Could Improve Access for Some 
Workers, GAO-03-353 (Washington, D.C.: Feb. 14, 2003). 

[5] GAO-06-80, pp. 25-26. 

[6] See Section 905 of the Pension Protection Act, Pub. L. 109-280. 

[7] GAO-02-85, p. 3. 

[8] This type of pension plan, known as a deferred retirement option 
plan (DROP), is largely limited to the public sector. 

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