Page 55 - increasing-the-value-of-age-guidance-in-employers-age-management-strategies

Increasing the value of age: guidance in employers’ age management strategies

4.3. Coordination of active ageing and guidance

4.3.1. Institutional steps towards longer working lives
Since 2000, Member States have adopted a number of measures aimed at
reform of the pension and social security systems. Most Member States have
increased the statutory pension age, developed plans for the gradual
convergence of pension ages for men and women, and have raised the age of
entitlement or increased the period of contribution needed to claim full retirement
benefits. Some countries are considering a link between average life expectancy
and pension age, such as the case of Sweden.
In several countries early retirement schemes have been closed, restricted,
or made less attractive, such as in the Dutch case, where early retirement
payments are subject to special taxation. Simultaneously, various forms of
gradual, phased, and partial retirement schemes have emerged. Member States
have adopted career-end planning policies which allow workers to plan a
transition period between work and retirement in which they can reduce working
hours while benefitting from compensation allowances (Adecco Group, 2011;
Eurofound, 2012a; 2012b).
The focus is shifting in all countries. Most already have reduced the national
schemes for early retirement. One exception is Denmark where the retirement
age has not increased, although the age to request voluntary early retirement pay
(VERP) has increased.
It is also possible to combine work and the VERP: for each hour worked, a
proportional deduction is made from the VERP. Older employees who are eligible
for the VERP, but continue working until they turn 65 years, receive a tax-free
premium of around EUR 20 000. Employees who postpone taking up the public
old age pension will receive a higher pension when they actually retire.
Another example of this type of incentive comes from Sweden where income
tax rates on work have been lowered, creating a tax gap between income from
work and income from pensions. To encourage longer labour market participation
among senior workers the government in 2010 introduced a higher in-work tax
credit for people who have turned 65. To increase demand for hiring older
people, contributions paid by employers is about one third for people over the
age of 65, compared to younger employees. Hiring long-term unemployed senior
citizens is highly subsidised (75%).
In Germany the State provides financial support to companies that grant
their employees a gradual transition to retirement. Employers who offer workers
aged 50 and over a job can get a wage subsidy of up to 50%. The standard

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