golfing , Southern Bavaria in 2017 . BMW realized that its workforce is aging and that changes to the production line were necessary to keep their employees happy and healthy . The managers of the BMW plant decided to implement minor changes : “ better seats , new workbenches that could be adjusted to an individual ’ s height , wooden flooring that provided better cushioning and insulation .”
When the BMW managers implemented the workplace changes , they also assigned a mix of younger and older workers to operate next to each other at a regular production pace of 560 gear boxes per day . After three months of the mixed production line and subtle workplace changes , BMW found that the mixed age production line productivity improved by 7 %, the initial absenteeism rate decreased by half , and the defect rate dropped to zero .
COVID federal relief funds could be a way of funding the necessary workforce training and learning opportunities for aging workers . Catalyzing employers to educate and train their older workers would benefit Colorado ’ s economy , older workers , and employers .
The Aging Workforce Initiative ( AWI ) is another example that Colorado could reference and expand on for training and educational purposes . AWI is a program that was made with the intent to help employers more easily assist with the needs of the aging workforce , specifically workers 55-years and older . The program is funded by the U . S . Department of Labor ’ s Employment and Training Administration . The program focuses on using grants to help build a better capacity for the workforce to assist the older individuals and to help the older individuals learn model skill development . In AWI , the companies selected to receive the $ 1 million grants were responsible for targeting a few key areas that are listed in the Solicitation for Grant Applications . The specific areas ranged from training techniques to self-employment to enhancing already learned skills and targeting more needy older worker subgroups .
Such a program would focus on older adults training and education and could be funded by the state and implemented in Colorado . The grants could go to five to ten Colorado communities throughout the state ensuring rural , mountain , plains , and the Denver Metro Area were included . This would utilize the lessons learned from AWI and apply them to the Colorado program , provide further enhancements that would , equip older adults with the ability to evolve and adapt to the changing skill sets and knowledge needed to continue work thus expanding the talent pool for employers to draw from .
A Policy Shift to Phased Retirement Options
Colorado employers could continue to access decades of mature talent by creating more phased retirement options that allow an employer to gradually reduce hours worked for the aging workers . This would allow older experienced employees to mentor younger talent as well as maintain corporate productivity and revenue generation . Colorado could utilize part-time work , seasonal work , volunteer work , and job-sharing to incentivize the aging workers to remain in the workforce and take advantage of a phased retirement plan .
For some older adults , staying engaged in the workplace in a capacity less than full-time would allow them to continue working for as long as they want to . The concept of phased retirement allows aging workers to reduce their working hours as they start their transition toward retirement . A phased retirement program in Canada allowed workers to decrease their working hours and receive a portion of their pension benefits from employer-sponsored pension plans . These same workers were still allowed to accrue pension benefits in the same plan as they were collecting benefits and still working . Although Colorado could not implement this exact program , it is
WORK FORCE
important for the state and its businesses to acknowledge the abundance of options for phased retirement plans that could be replicated .
Recent Legislation – 2021 and 2022 Legislative Session
One factor that can impact an older adult ’ s decision to keep working is how retirement income is treated for tax purposes – that is , whether an older adult is penalized for earning more income by reducing benefits from existing retirement streams .
In 2021 , Colorado passed HB21- 1311 . Before this bill was signed into law , taxpayers aged 55 to 64 could deduct a limit of $ 20,000 of pension and annuity income , including federally taxable social security income , when calculating their taxable income in the state of Colorado . While Coloradans aged 65 years and older could deduct up to $ 24,000 when calculating their taxable income . However , with the passage of the bill , beginning in 2022 the limit was raised so that all federally taxable social security income could be deducted . The limits still apply to all other forms of pension and annuity income . Policy that would reduce caps on other forms of pension and annuity income would increase older adults ’ willingness and interest in staying in the workforce longer .
In the 2022 legislative session , HB22- 1101 would expand a program that is set to expire in July of 2023 . The program “ allows a public employees ’ retirement association ( PERA ) service retiree to work full-time without any reduction in the service retiree ’ s retirement benefits www . aamdhq . org APRIL 2022 TRENDS | 35