Phased Retirement The Way of the Future

1
Phased Retirement The Way of the Future

• 2006 Annual MeetingConference of Consulting
  Actuaries

2
Whats Shaping Retirement Today?

• Shrinking labor force growth rate
• Aging workforce
• Increased life expectancy
• Need for financial security

3
Changing Shape of the American Population
4
Workforce Changes BLS Projections
5
Whats Happening to Retirees?

• 25 of retirees find bridge jobs
• Some move to self-employment
• More than half of those with bridge jobs go to
  other wage/salary jobs
• Nearly 75 of male pension recipients age 50-54
  are also working

6
Phased Retirement through Qualified Pension

• Pension plans may not permit distributions prior
  to earlier of
• Separation from service (retirement)
• Attaining normal retirement age
• Proposed Phased Retirement Regulations
• Bona fide phased retirement

7
Proposed Phased Retirement Regulations

• Bona fide phased retirement program
• Voluntary
• Age 59 ½
• 20 reduction in hours worked
• Pro-rata distribution
• Annualized benefit accrual
• Normal retirement age

8
Pension Protection Act of 2006

• In-service distributions permitted for
  participant who has attained age 62.
• No administrative requirements
• No earlier distribution
• Proposed phased retirement regulations
• Guidance Priority List