Rep. Earl Pomeroy of North Dakota offered the same proposal today in the House of Representatives.
The bicameral, bipartisan measure would amend the federal tax code to clarify rules that now inhibit employers from offering phased-in retirement, where workers could collect a portion of their retirement benefits along with pay for part-time work. Today, an estimated 16 percent of large companies offer phased retirement in some form. Another 28 percent say they are interested in offering such a program during the next two years.
Grassley said "it's very important that Congress take action and foster an environment where employers can respond to the changing work force. The tax code shouldn't stand in the way of creative ways to address the shrinking labor pool, while at the same time helping older Americans who may not have enough savings to retire completely but would like to work a part-time schedule."
As chairman of the Senate Special Committee on Aging, Grassley held a hearing in April to urge work-friendly policies for seniors. Employment rates of older Americans have risen since the mid-1980s, for the first time since World War II, according to the AARP. Despite older workers' keen interest in phased retirement, too few employers offer such programs, the AARP said at the hearing.
The bills introduced by Grassley and Pomeroy would allow employers to voluntarily provide in-service distributions to workers when workers reach age 59½ or 30 years of service. Currently, the tax code bars employees from receiving pension distributions before they reach a pension's designated retirement age. The proposed change also would help workers who manage a do-it-yourself type phased retirement when they retire completely from long-time employers and take jobs with new employers.
Pomeroy testified before Grassley's April hearing on older workers. He is co-chairman of the House Social Security Task Force and works on pension-related policy initiatives.