The public relations committee serves all committees, publishes a newsletter, and is presently engaged in sponsoring a radio program on the various proposals for medical care for the aged. I'm enclosing copies of the SPA newsletters, the minutes of the special meeting of the employment committee, and the report on "Preretirement Preparation Programs in 12 Industries" as illustrations of some of our activities. It is hardly necessary to assure you that the San Francisco Program for the Aging is most anxious to cooperate with you in any manner that will forward our mutual objective of assisting the elderly. Sincerely yours, AUSTIN MORRIS, Chairman, Executive Committee, San Francisco Program for the Aging. SAN FRANCISCO PROGRAM FOR THE AGING-REPORT ON INTERVIEWS WITH REPRESENTATIVES OF 12 LARGE INDUSTRIES REGARDING PRERETIREMENT PREPARATION PROGRAMS I. PURPOSE The executive committee, San Francisco Program for the Aging charged the committee on employment, preretirement preparation and income maintenance to "Stimulate preretirement preparation programs among public and private employers, offer consultation in planning and use of speakers bureau."1 The subcommittee on preretirement preparation decided that information regarding existing programs in industry, as well as attitudes of employers on the subject was prerequisite to the delineation of the committee's goals and its role in carrying out this charge. II. METHOD It was decided to secure this information through personal interviews rather than questionnaires because of the subjective nature of some of the information sought. A sample of 13 large firms was selected, using as criteria: (1) major diversified types of industry; and (2) headquartered in San Francisco. One firm was deleted from the study subsequently.2 A schedule designed to obtain comparable data and to serve as a guide to the interviewer was prepared by the director of SPA in consultation with a SPA committee member (who is a supervisor of retirement for a large industry) and the research department, United Community Fund. Company officials responsible for administering employee benefits were interviewed by a SPA staff member who was available to the project 2 days per week. Firm visits were conducted during the period September 26, 1961, to January 5, 1962. Interviews, which ranged from one-half hour to 24 hours in length, were arranged in advance by telephone or through formal written requests. III. FINDINGS Because relationships exist between compulsory retirement plans and employee benefits and both are related to problems of retirement, information concerning these subjects was obtained. Charge to the committee on employment, preretirement preparation and income maintenance, Mar. 6, 1961. 2 Not headquartered in San Francisco. Range of numbers of personnel retiring in San Francisco annually 1 Some firms reported exceptions on a very limited basis and only in situations involving company needs. Some reported age 65 for men ; age 60 for women. 2 In 1 of these firms applies only to nonunion personnel. 3 In 1 of these firms applies only to salaried personnel. Some of the respondents suggested that the magical age of 65 had its origin in the establishment of the Social Security Act. Forty-four percent of those firms having compulsory retirement initiated this policy following social security legislation. Sixty percent of the firms having compulsory retirement established pension plans simultaneously with the adoption of the compulsory retirement policy. Several firms have instituted procedures whereby employees can retire prior to the age 65 date and have liberalized pension plans for this purpose. One firm reports an average of 70 percent of employees retiring prior to age 65. (This is exclusive of personnel retired for disabilities.) Another firm reports 50 percent of their female personnel retire prior to age 65. And still another advises that 33 percent retire early. A. Pensions BENEFITS Number of firms having pension plans---. 11 1 In some of the firms pension plans differ for union and nonunion personnel. In these instances, union personnel benefits result from union contract negotiations; nonunion personnel are beneficiaries of company-sponsored programs. Same plan for all personnel_. Different plans for union and nonunion personnel. Number of firms 7 4 Formulas for determining pension amounts differ from firm to firm and do not lend themselves to completely valid comparisons. On a modal average, retiree benefits are equal to 50 percent of salary/wages for relatively long service employees and vary by service and compensation. Some firms consider social security benefits plus company benefits as well as reduced taxes, etc., in arriving at such estimates. Plans differ for provision of spouses upon death of the retiree. In some instances the employee can elect options prior to retirement. In other instances retirement benefits automatically continue to be paid to the spouse, though the benefits are less. In still others the benefits cease on the death of the retiree. Eligibility for participation in retirement plans and provisions for pension payments differ widely. Generally, minimum years of service are required for eligibility. One firm participates in a plan whereby service years are transferred from one company to another (within the industry). B. Medical plans All of the firms have medical, hospital, and surgical plans for employees. Same plan for all employees- Negotiated through union contract. Number of firms 8 4 Two plans continue after retirement. Of these, one is limited to a year, the other has a maximum benefit amount. The remaining 10 have provisions for retiree option of converting the policy. In all instances, the premiums are higher and the benefits less. In amplification of the statement that retirement does not present problems, three respondents noted that compulsory retirement policies eliminate potential problems, since both the employer and employee anticipate retirement in advance. The two respondents who suggested that retirement presents problems listed them as: (1) Determining who should be urged to retire for health or other reasons. This is particularly difficult in those cases where the individual involved is under 65, as there are no provisions for pension benefits prior to age 65. (This firm does not have compulsory retirement.) (2) Determining and meeting the financial needs of individuals, who because of relatively short service and low income, will not receive pension benefits comparable to the norms. Fear and insecurity due to loss of status_. Anxiety and loneliness due to loss of daily contact with work group_. No problems.. 663342 Two respondents stated that generalizations are difficult and that problems may or may not occur depending upon individual motivation as well as degree of preparation for retirement. One respondent suggested that the urban retiree has a greater problem than the rural retiree. Two stated that the executive group is more affected by retirement than personnel from the lower echelons. PRERETIREMENT PROGRAMS The California Institute of Technology definition of preretirement preparation has been used as the criterion for evaluating programs of the firms interviewed.* Because this definition was not introduced during the interviews, company programs perceived as preretirement preparation are not necessarily so treated in this report. Firms having a program. Firms not having a program_ A. Description of preretirement preparation program Number of firms 1 11 The one firm having a plan evaluated as a preretirement preparation program first became interested in the subject in 1956. A comprehensive plan was developed in that year which was soon discarded. The plan, which combined educational and counseling features, attempted to involve the potential retirees through the use of comprehensive questionnaires covering every phase of retirement. These included such subjects as nutrition, finances, health, where to live during retirement, use of leisure time, etc. This was abandoned because it was felt to be an infringement of the personal rights of employees. The current program, instituted in 1961, is much less comprehensive, yet would seem to meet minimum requirements as earlier defined. Regional group meetings, which last about 21⁄2 hours, are held on an annual basis. Each retiree is invited to attend a meeting 2 years prior to his retire ment date. This invitation is sent by letter. In addition, some of the division personnel managers visit the employee's home as added assurance that the spouse knows of the meeting and the fact that she is included in the invitation. Attendance, which is voluntary, is held on company time. The company provides transportation for the employee and spouse. To date, approximately 100 percent of the employees have attended; for the spouses, the average is approximately 50 percent. The meetings, conducted by the district personnel managers, cover all financial aspects facing the retiree. These include such areas as company benefits, social security, and income tax regulations; specialists in the latter two fields are recruited to talk to these subjects. Local attorneys and doctors are invited to review potential problems facing the older person, and to acquaint them with local resources. Brochures describing community activities (when such publications exist) and organizations are distributed. This is sometimes supplemented by the employees or their spouses who relate firsthand experience as members of voluntary agencies or groups. Individualized manuals are distributed, which include: a detailed report on company benefits accruing to the individual; information on Veterans' Administration; social security data; and income tax. From then on, individual meetings at 18 months and 1 month prior to retirement are held with the personnel manager to discuss employee benefits. Counseling may take place on other matters at the employee's request. B. Activities in other firms not evaluated as preretirement preparations programs Some of the firms have plans for interviewing prospective retirees prior to retirement date. Interviews conducted by staff or line personnel on a 1-to-1 basis, are primarily concerned with discussions about company benefits. Other problems are discussed if initiated by the prospective retiree. Time prior to retirement that company initiates interview with employee: 10 years 5 years- 1 year- Number of firms 11211 3 months 1 month__ One firm reports that department heads initiate individual conferences with each employee when age 60 is reached to discuss company benefits and problems of retirement. Benefits are then confirmed by letter. Annual interviews are scheduled until the employee retires. This company emphasizes the 1-to-1 relationship between the employee and the department head. One respondent reported that the firm conducted group preretirement meetings in the past. Attendance was voluntary and generally attended by those who had already given consideration to retirement. In the judgment of the firm, those who could most benefit from the program did not attend, so the program was discontinued. Number C. Attitudes A need may exist for preretirement preparation programs Retirement preparation planning is the responsibility of the employee--- Program is not necessary- of firms 72223 Two respondents, in indicating a need exists, expressed the opinion that the older group constituted a possible political threat; if not happy, the older group can do damage to self and the Nation. The idea was also noted by two respondents that it is to the company's interests to do all possible to assure that their retirees are happy and content with company policies; thus the need for a program was reinforced. Information about preretirement preparation has reached many of the firms. Just what form it should take and whether the cost is warranted are unanswered questions. Some respondents frankly admitted that they are waiting to learn from the experiences of companies that have active programs. One respondent seemed to sum up some of these attitudes when he stated: "A great many companies are thinking about it (preretirement preparation) and are aware that there may be something in it. Most companies are aware of a problem and are interested to explore it but few have come up with a specific program; there is not agreement as to scope." The point was made by two respondents that both industry and the community have a responsibility to the retiree. Methods of the community meeting its responsibility were suggested; casework services, adequate housing, employment service, and recreation. One respondent suggested that the community, possibly through the use of radio and TV or other facilities, should assume the responsibility for preparing employees for retirement. Some firms (four), both those favoring the need for a program and those that feel one is not needed, expressed the opinion that protection of the individual's rights are involved, and questioned whether firms should meddle in other people's business. Two added that paternalism would not be accepted by the employees. Those respondents not subscribing to a need for a plan, expressed the opinion that preparation for retirement is an individual matter and does not concern the firm. POSTRETIREMENT PROGRAMS Seven of the firms have programs for the retiree. Paid subscriptions to magazines for the older person- Yearly visits or phone calls_ Birthday letters__ Social clubs____ Discount privileges. Financial assistance. Inviting retiree to company affairs.. All respondents were most cooperative. SPA's interest in the field of preretirement preparation seemed to be accepted as a legitimate one. The respondents quite frankly and openly discussed company policies and freely discussed their philosophies and ideas. (Assurance of the confidentiality aspect, was, I feel, very important.) Some of the respondents added that expressed opinions did not necessarily represent the official viewpoint of the firm. It appeared clear that the majority of respondents were aware that preretirement preparation is receiving nationwide attention. Three of the respondents participated in the California Institute of Technology seminar held in 1960. Others have read, or reviewed plans used in comparable industries. In general, the idea was expressed that there may be a need for preretirement preparation programs, but just what the scope should be seems to be the question. Some firms are waiting to see what others will do, hoping to benefit from such an experience. It may be significant that concepts of the meaning of preretirement preparation varied. Some respondents viewed preretirement preparation as merely a refinement for notifying employees of company benefits. Others associated it with counseling service. Still others viewed it as having overtones of meddling. Many firms are experimenting with or contemplate subscribing to magazines (oriented toward the retiree) for all retired personnel. Methods of assessing the value of such a program seems to be a problem for some. Yet I have the impression that this method is being adopted because of its concreteness and |