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Companies prepare for baby boomer exodus

Bill Copeland of Annandale, Va., who retired recently from the real estate business, right, works with customer Gary Petrosian at a Home Depot in Falls Church, Va., in March. When executives at Platte River Power Authority, an electric company in Fort Collins, Colo., surveyed its employees 18 months ago, they were stunned by a particular finding: 40 percent of the company’s 200 workers said they intended to retire over the next five years.With little chance of hiring from other stretched power plants - and apprenticeships for technicians typically taking at least four years - executives faced a stark reality. “We’ve got to be moving right now,” says Dave Green, human-resource manager. He is scrambling to hire trainees and recently created a new job - plant assistant - to fill apprenticeships as soon as they open up.

Across a wide swath of industries, companies are starting to address the impending exodus of baby boomers - the 76 million Americans born between 1946 and 1964. The oldest boomers will begin turning 60 years old next year. Just two years later, they can start collecting Social Security benefits. Many company retirement benefits kick in around the same time: Most workers in traditional, defined-benefit pension plans become fully vested between the ages of 55 and 62. And those with 401(k)s or other defined-contribution plans can tap them with no restrictions starting at age 59.Many baby boomers, of course, may decide to stay on the job longer than previous generations - particularly to shore up savings. Still, the number of potential retirees is stark: More than 40 percent of the U.S. labor force will reach the traditional retirement age by the end of this decade, according to a new study by the Conference Board, a New York research organization. In the next seven years, the number of U.S. workers between ages 55 and 64 will grow 51 percent to 25 million, meaning the fastest-growing portion of the work force is the one at most risk of retiring soon. At the same time, the number of workers between ages 35 and 44 is expected to shrink by 7 percent.Some experts think the impact won’t be as stark as the numbers suggest. Fully 70 percent to 80 percent of baby boomers expect to continue working in later life, several studies show.Still, many companies simply don’t know how many of their workers plan to retire, and when - in part because they fear that asking will open the door to age-discrimination claims, says Jeri Sedlar, co- author of the Conference Board’s report. There are no federal rules against asking employees retirement-related questions. But the formal collection of such information could be used as fodder in a lawsuit if a company later laid off, fired, demoted, or failed to promote the workers who had been surveyed.Some companies have sidestepped these concerns by querying workers anonymously or asking employees of all ages about their plans five years from now, says Linda Barrington, research director at the Conference Board.