When it came to retirement, “I didn’t want to just jump off the cliff and go cold turkey,” Cluff said.
So in June, he took advantage of a program his organization offers that allowed him to transition into retirement gradually, stepping down to 30 hours a week.
It’s a set-up known as “phased retirement,” a catchall term for a variety of formal and informal programs in which employers permit their staff to leave jobs gradually rather than abruptly.
Experts say this scenario provides flexibility to employees while allowing employers to hang onto experienced workers with deep expertise.
Phased retirement could be on the cusp of becoming more common in the Washington region. Congress passed legislation in July that will allow many federal workers to notch down to part-time hours and receive a pro-rated salary and annuity.
And experts say that move could lead other workplaces to follow suit, because businesses and organizations in the area feel pressure to match the government’s benefit offerings so they can better compete for the most talented workers.
“Flexibility is the new normal,” said Marcie Pitt-Catsouphes, director of the Sloan Center on Aging & Work at Boston College. “It’s not that everybody’s doing it all the time, but this isn’t such a jarring concept.”
Phased retirement also seems particularly well-suited for the times: People are living longer, meaning they’ll have to stretch pension money or individual retirement account savings further. And since many workers’ savings in such accounts were hit hard during the recession, staying in the workforce longer could prove an attractive option.
Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management, said large organizations with more than 500 employees are most likely to adopt these policies.
“The resources are there, and the capital to invest in those types of programs is there,” Elliott said.
Phased retirement programs can come in different forms. Elliot said that a reduction of hours is the most common design. But some workplaces put retirees into a part-time on-call pool, while others offer consulting agreements. Many allow employees to keep their health insurance and life insurance plans.
It’s also frequent that this arrangement is offered only on a case-by-case basis.
“Employers want to retain the workers that have the skills they most need,” said Sarah Rix, policy analyst with the AARP Public Policy Institute.
SHRM surveys show that the number of workplaces that say they offer formal phased retirement has been flat at 5 to 6 percent since 2007.
According to a 2009 study by the Sloan Center, 44 percent of companies offered phased retirement to some workers, but only 9 percent offered it to more than half of its workers.
However, Rix cautioned that it’s difficult to measure how widespread phased retirement programs are because many of them are informal and because the definition is so broad.
Mitre’s program has been in place since the 1980s. Mike Tice, the company’s director of human resources operations, says the nature of their business makes this policy especially practical.
“The company has very long term projects with the government, and we need deep experts,” Tice said. Retaining older workers is appealing, he said, because they “have that deep knowledge, the expert culture that we need.”
Another employer, Falls Church-based Inova Health System, estimates that 10 percent of its total workforce is involved in its informal phased retirement program.
The hospital system has a variety of ways of accommodating workers who aren’t yet ready for full retirement. In some cases, employees step down their hours, putting in somewhere between 24 and 36 hours of work a week. And people in administrative roles are offered the chance to telecommute, which gives them more flexibility.
And for nurses, there’s yet another option.
“If the job is getting too hard physically, we give them opportunities to change the scope of the job,” said Angie Mannino, Inova’s senior vice president for human resources.
In that case, a nurse could switch to a role that focuses on training and educating other nurses instead of working with patients.
The concept of phased retirement has been around for decades, but it gained more traction at the turn of the century as members of the massive baby-boom generation began to hit retirement age and their employers had to grapple with the possibility of losing large numbers of workers in close succession.
Still, there were roadblocks to implementing it. Experts say the IRS has proposed guidelines for phased retirement, but it has not established any formal rules. That lack of a concrete road map, they say, has made employers cautious about starting up such a program.
And for workers who had defined pension benefits, it wasn’t necessarily a good deal. If your pension was based on the amount of money made in your final year of service to the company, then downshifting to part-time work at the end of your career would cut the funds you received later.
That has become less of an issue as firms have moved away from pensions in favor of 401(K) and other employee-directed retirement plans.
“The onus of management and planning has shifted over time from the company to the individual,” Pitt-Catsouphes said.
These individual retirement accounts took a drubbing in the 2008 financial crisis, leaving many older workers feeling like they couldn’t afford to leave the full-time workforce.
But, with a slow economic recovery under way, enthusiasm for this type of arrangement could increase.
“I’m a little surprised that we don’t see more of this now, because I don’t really see too much of a downside,” Elliott said.