Incentives for Older Workers Act

May 30, 2008

The Incentives for Older Workers Act, S. 2933, would eliminate barriers for older Americans who want to stay in the workforce longer, and encourage employers to recruit and retain older workers.

According to the Special Committee on Aging, a 2007 Conference Board study reports that current retirement trends could create a U.S. labor shortage of 4.8 million workers in 10 years.

The sponsors of the bill, Senators Gordon Smith (R-OR), Herb Kohl (D-WI), and Kent Conrad (D-ND), members of the Aging, Finance and HELP Committees, created the Act to reduce this decline.

The Act would, among other things:

• Remove penalties in certain pension plans for workers who phase into retirement by receiving a lower salary while working reduced hours.
• Form a national resource on aging and the workforce within the Department of Labor to college, organize, and disseminate older work information.
• Clarify that certain defined benefit pension plans can define normal retirement age under their plans as the earlier of 1) the attainment of a specified age, or 2) attainment of 30 or more years of service.
• Reduce the amount of Social Security benefits lost to seniors who claim benefits before reaching normal retirement age and while they continue working.

We do not expect action on the bill this year but some of its provisions could be picked up in the context of a larger bill next year.