about every company in the country that was getting into this type of training program. First, there is a simple preretirement interview. This is where the individual comes in just at retirement and sits down with some representative of management, and simply visits with him on various subjects. There is another type of program, one of individual counseling, coupled with a physical examination, 2 or 3 years prior to retirement. You gave him this physical examination, to see that he is physically fit at and/or after retirement. The third one is group counseling where you do have a formal type of program with many individuals present to discuss various subjects. The last type of program is one of general communication where the company just mails out magazines, periodicals and so on to the people who are approaching retirement, anywhere from 4 to 7 years before reaching 65. The next big question we asked ourselves, just what does the retiree want to know? What are his problems? and How do we fit into them? We found that retirees are concerned with employment (postretirement employment in many instances) or financial security. He is very concerned with that. Also, health, housing, use of his leisure time and what his family relationships will be after he stops working. OBJECTIVES OF PRERETIREMENT PLANNING Then we get right down to the real question of what are the objectives of a preretirement planning program? The first, is to primarily prepare the employee emotionally for retirement. Secondly, to encourage him to plan for life after retirement, and, thirdly, to supply him with enough information that will aid him in the solution of his problem. SUGGESTED PROGRAM Now with all of this research material we then develop a program which is made up of three parts. The first part is group counseling, where we get together about 20 or 25 people age 60 and over and with an hour and a half session a week we discuss 6 specific topics of interest in a very informal manner. These topics are "What Is Retirement Going To Be Like," "Making the Most of Retirement Income," "How Can I Keep My Health in Later Years," "What Can I Do With My Time After I Retire," "Should I Work After I Retire," and "Where Shall I Live and What Can I Do To Have a Good Family Life After I Retire." These subjects are discussed in six hour-and-a-half sessions. The second phase of our program is individual counseling. The formal program is given at age 60 and we hope eventually to give it to those around 55 and over. There is a gap in between the time he takes the above program and when he actually retires. So we have supplemented the first phase with individual counseling. Here the immediate supervisor of the employee and the personnel department annually discuss the person's plans for retirement, his workload, and his future assignments. We also act as a sounding board for problem areas that might develop as he approaches retirement and help him seek solutions to these problems. The third phase of our program is just one of general communications where periodically we mail information to these people age 60 to 65, publish articles in our house organ, and post bulletin board notices, etc., to keep him constantly informed. These are assists that provide information that will help him develop his plans for his retirement. Basically that is the program as contemplated. Senator MCNAMARA. Do you have any costs; have you arrived at any costs in this preretirement program such as the one you have described? Mr. DEREMO. Naturally that will vary, depending upon the number of retirees you have. We estimate about $2,000 annually for our company. Senator MCNAMARA. Does this include a physical checkup of some sort? Mr. DEREMO. No. Senator MCNAMARA. I suppose that would be rather preliminary or how far do you go? Mr. DEREMO. We don't plan on partaking in that phase of the program. Senator MCNAMARA. You recommend the prospective retiree have it on his own? Mr. DEREMO. Absolutely, we maintain the private patient-physician relationship rather than have the company get involved in this. We take the position of promoting it, getting him to do something about his health. The matter ends as far as our responsibility is concerned right there. Senator MCNAMARA. The way you stated it, I assumed it was a part of your preretirement plan but it is just that you advise it at this point. This would be a very expensive phase? Mr. DEREMO. Some companies do that but we would not at this point. Senator MCNAMARA. Do you know whether this preretirement plan is being adopted by other companies or other industries other than your own, or is this quite a unique approach? Mr. DEREMO. It is about 4 years old. I think the Bell & Howell people of Chicago are one of the first ones to get in this area. They worked with the University of Chicago in developing a program. In fact, they were a pilot company, you might say, but there are many across the country who are rapidly getting into it. Many of them are making studies such as the one we have just concluded, but all of them vary in degree or complexity as I mentioned earlier. Senator MCNAMARA. Do you find you have to do some selling to some of these individuals? Do some of them resent this preretirement plan of yours, or do they generally accept it? Mr. DEREMO. It is a voluntary program. Senator MCNAMARA. Do they generally participate in it or not? Mr. DEREMO. Well, as I said earlier, we haven't had it in operation, so to speak, up to this point on a formalized basis. We have had individual counseling and so on for many years. Senator MCNAMARA. You haven't tried to do it overall as yet? Senator MCNAMARA. Are you planning shortly on trying to do it? Mr. DEREMO. Yes. Senator MCNAMARA. Do you anticipate any opposition or resentment on the part of individuals, whether you are prepared for it or not? Mr. DEREMO. We realize we have a promotion job to do. Senator MCNAMARA. A selling job? Mr. DEREMO. Before it's actually in operation. Senator MCNAMARA. I think you have laid the groundwork pretty well. I am sure this is a very interesting plan, and I am very glad to make it a part of our record. We appreciate very much your appearing here and giving us the benefit of your experience up to date. Mr. DEREMO. Thank you. Senator MCNAMARA. Thank you very much. (The prepared statement of Mr. Deremo follows:) PREPARED STATEMENT OF JAMES DEREMO SETTING UP A PRERETIREMENT PLANNING PROGRAM Our approach to the problem of setting up a preretirement planning prográm can be broken down into three sections: I. Research or accumulating date, II. Development of a program, and III. Installation. I. Research data regarding retirement In accumulating data so that we could determine whether or not a preretirement planning program was good for us, we asked ourselves a series of six questions as follows: (a) Is there a problem of the senior worker or the retiree?—In answering this question we found that the life expectancy increased tremendously from 1900 to 1950. In fact, the life expectancy increased from 40 to 70 during this period. We also found that in 1900, 4 percent of the population was 65 years of age or older and that in 1950, 8 percent of the population fell into this same category, We also found that because of the change from rural to urban living, the older person no longer lived in the family home and continued as a member of the family circle, but rather lived alone and quite independently from the other members of his family. We also found that generally the life of a working person is comprised of two factors: one is raising a family and the other is earning a living. At retirement these responsibilities are gone and a tremendous void is left in the life of the retiree. (b) What does this problem mean to us?-We decided these people are definitely a part of our community and since we are a part of that community, we must share responsibility for this problem. These people affect our community and our community affects us. We decided, that the the individual is primarily responsible for preparing himself for retirement; however, he has to be motivated to look forward to retirement and to take action in preparing himself for it. The responsibility for providing this motivation thus falls upon industry or business. (c) Why is a program good for us?—The most important reason is that it carries out the basic purpose of a pension program which is to help the retiree plan and live a successful retirement. We also believe it will enhance our public relations in attracting and enabling us to retain better employees. By the same token, we do not want a disgruntled retiree in the community acting as a "bad-will ambassador." We also believe that it will increase the efficiency of the prospective retiree during the last 5 to 10 years prior to retirement, with the employee knowing that he has solved some of the problems relative to his retirement. It also will create higher morale in the entire organization, it is a way of recognizing an individual for his years of service, and it provides initiative for the individual to retire before he becomes physically unable to perform his work and must be handled as a personnel problem. (d) What are the various kinds of programs?-To answer this question we had to ask ourselves the following questions. 1. How broad are these programs and whom do they cover? 2. Do they cover hourly and salary employees? 3. Does the same program apply to hourly and salary employees? 4. How about the use of magazines and other publications? 5. How about the "dinner and gold watch ceremony"? 6. What types of retirement programs are there? 7. Are they held on company time? 8. Are wives included? 9. At what ages does a company offer this program? 10. Are they conducted on or off company premises?. 11. Are they held on company time or employee time? 12. Who conducts or administers the program? 13. What about the use of resource people? 14. How do you promote the program? 15. How is it installed? Following are the five kinds of preretirement programs that we found: 1. A simple preretirement interview. 2. Individual counseling, coupled with physical examination. 3. Group counseling. 4. General education via booklets, magazines, house organ, etc. 5. Combination of any of the above. (e) What does the retirees want to know, or what concerns him prior to retirement?-We found the retiree is concerned with postretirement employment, financial security, health, housing, use of his leisure time, and his family relationships. (f) What are our objectives of a program?—1. Primarily to prepare the employee emotionally for retirement. 2. To encourage the employee to plan for life after job retirement. 3. To supply the employee with information which will aid him in the solution of problems related to retirement. This concludes the accumulation of basic data on this problem. Now I would like to get into the phase of actually developing a preretirement planning program. II. Development of preretirement program (a) Our program consists of group counseling for those 60 years of age and over. Classes of about 25 people, including spouses, will participate in the following 6 discussion sessions 11⁄2 hours in length to be held once a week. Hourly employees and wives will meet separately from salaried employees. The program will be held on company premises, half on company time and half on the employees' time. 1. What is retirement going to be like? 2. Making the most of retirement income. 3. How can I keep my health in later years? 4. What can I do with my time after I retire? 5. Should I work after I retire? 6. Where shall I live and what can I do to have a good family life after I retire? (b) The second phase of our preretirement program is individual counseling. It is started during the year in which the employee reaches age 60. Before the group counseling course ends, the following initial interviews will be held with the employee: 1. The employee's supervisor will participate in the following ways: (a) Inform and encourage the employee to participate in the 6 weeks' preretirement planning program. (b) Discuss possible job or position replacement. (c) Plan the workload until retirement. (d) Act as a sounding board for problem areas where additional counsel and help might be given to the employee. 2. The industrial relations or personnel division will be responsible for the following: (a) Discuss postretirement plans with the employee. (b) Assist in the problem areas found by the supervisor. (c) Arrange for a visit with the pension director. The industrial relations division will be responsible for coordinating these interviews and seeing they are carried out on an annual basis or more often, depending upon the circumstances and personalities involved. (c) The third phase of our program is general communications consisting of a program of periodic articles in the house organ, posting information on company bulletin boards and mailings to the supervisors' and to the employees' homes. One of the national monthly news magazines on retirement planning will also be mailed to all employees 60 years of age and over. III. Installation of preretirement planning program The third area dealing with the installation of the program can be divided into six items: (a) A series of 2 meetings of 1 hour each for groups of 25 to 30 supervisory personnel will be held to discuss the following: 1. The purpose and objective of the program. 2. The role of the supervisor in the program. 3. The concept and need of preretirement planning. 4. The general content of each of the 6 weeks' sessions. (b) A meeting with a union shop committee will be held to explain the program and its objectives and to solicit any ideas or recommendations. The object of this, of course, is to get union backing and support of the program and to help sell it to the employees. (c) Send out an invitational letter to all employees 60 years of age and over informing them of a general meeting explaining the program and its objectives. This letter will go out over the signature of the president of our company. (d) Personal visit by the immediate supervisor to explain the purpose of the program and encourage employees under his supervision to participate. (e) Conduct a general information meeting and social periods for all employees 60 years of age and over. At the information meeting, the president of the company will explain the purpose and objective of the course and will then turn over the meeting to a member of the industrial relations staff who will present a detailed explanation of the program. (f) Conduct the course. Senator MCNAMARA. Alex T. McFadyen, executive secretary, Chamber of Commerce, Grand Rapids. We will be glad to hear from you, sir. Do you have a prepared statement? Mr. MCFADYEN. I have furnished it. Senator MCNAMARA. It will be put in the record entirely and you may proceed in your own manner to summarize if you will. STATEMENT OF ALEX T. MCFADYEN, EXECUTIVE SECRETARY, GREATER GRAND RAPIDS CHAMBER OF COMMERCE, GRAND RAPIDS, MICH. Mr. MCFADYEN. One point I made in the formal presentation was to the effect that the Federal Government I believe could help in this program to some extent by eliminating certain Federal expenses which it does now incur or have been proposed which contributes I believe to inflation and the loss of the purchasing power of the dollars that the aged and the aging now have, which they could use themselves for their necessities and so forth. I refer to a western tax counsel publication from Chicago giving the figures for 1957 in which it showed Michigan pays into the Federal Treasury $19.29 for each dollar it gets back in Federal payments to State aids and grants and shared revenue and appropriations, regular appropriations and social security payments to citizens in this State. Now that $19.29 is in relation to a national average for all of the States of $7.48 so Michigan doesn't fare so well as the other States. Now these figures were taken from Treasury Department reports, Census Bureau, social security board reports and the State fiscal reports. PROPOSAL TO ELIMINATE CERTAIN FEDERAL EXPENSES Now we don't fare so well in Michigan, and it seems to me we would be better off to take care of our own problems. Such programs as I refer to on the part of the Federal Government at the present time we have, at least we had in 1958, a Federal debt of $276 billion. Now |