Phased retirement poised to become more common in Washington region

After more than 45 years in the workforce, Gary Cluff was ready for a change of pace. He wanted to spend more time traveling, do some volunteer work, and improve his golf swing.

And yet he still liked the sense of purpose he got from his job as a corporate recruiting manager at Mitre, a McLean-based research and technology firm.

(Jeffrey MacMillan/JEFFREY MACMILLAN) - When he reduced his hours, Cluff said he was able to devote more time to his golf game.

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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.