GAO: Phased retirement programs uncommon

Although many older workers were expected to take advantage of phased retirement, fewer than 15 percent thus far have reported gradually retiring from their jobs, a Government Accountability Office report finds.

Phased retirement, where employees approaching retirement age reduce their work hours and gradually transition into retirement, was expected to help mitigate a mass exodus of baby boomers leaving the workforce.

GAO found that most employees ages 61 to 66 who were still working maintained a full-time work schedule.

According to GAO’s review of studies and interviews with retirement experts, formal phased retirement programs remain relatively uncommon, but of those that are offered, they are more common among technical and professional workforces, such as education, consulting, and high-tech.

Out of 16 experts interviewed by GAO, 9 said that industries with highly skilled workers or with labor shortages are more inclined to offer phased retirement because their workers are more difficult to replace.

Furthermore, some employers are reluctant to offer phased retirement because of complexities with age discrimination and federal tax laws. “Experts and employers said programs that target highly skilled workers, who are often highly paid, could violate rules that allow for favorable tax treatment that generally prohibit qualified pension plans from favoring highly compensated employees,” the report notes. “Despite these challenges, most employers GAO interviewed who reported having phased retirement programs found them beneficial.”

Read the full report here.

Reader comments

Thu, Aug 3, 2017 Detroit

I would gladly participate in a phased retirement, but my organization is also still "developing" the guidance. Not sure what's going to happen when I retire at the end of this one is currently being trained to take over my position. Oh well.

Thu, Jul 27, 2017

My agency, DCMA, is still "developing" the rules for phased retirement. I will retire before they ever finalize the rules. I have been asking about it for three years.

Thu, Jul 27, 2017

let's see, slugs pace rollout, most agencies act like they know little to nothing about it, no one at CPOC or Dept. of the Army knows how or where to apply, what did you expect?

Thu, Jul 27, 2017

This is the same problem with telework; agencies are not allowing it. My job is IDEAL for telework at least 2-4 days a week but my Management won't allow it and Executive Leadership panders to the local management. It's time for CHANGE. Secretary level needs to clean house of all this bad management sludge and make the concrete blocks retire or get fired. They are still living in the 80's.

Wed, Jul 26, 2017 John Washington metro area

Not everyone spends their whole career with the federal government, so many may not have the required 20 years of federal service to qualify for phased retirement. In my case, in my mid-70s but with only 16 years of federal employment, I just retired. Now I'm working 15 hours a week for a private company familiar with my government work.

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