1. Institut für Gerontologie an der TU Dortmund
Prof. Dr. Gerhard Naegele
Institute of Gerontology at the TU Dortmund University, Germany
Work after (in spite of) retirement -
The role and interests of companies and governments –
Evidence from Germany

2. Institut für Gerontologie an der TU Dortmund
Introduction
 EU wide data show that the traditionally more or less rigid borderline
between the period of gainful employment and the period of “retirement”
without gainful employment is slowly dissolving.
 For Germany for those already retired currently only a small rate of gainful
employment can be assumed. Official figures show an employment rate of
about 5 % among those 65+.
 However, taking into account not officially registered paid work resp. paid
work in clandestine illicit employment higher figures can be assumed,
possibly amounting to distinctively more than 10 %. Recent figures indicate
a further increase in “silver work” due to different reasons.
 Two typical patterns of gainful employment can be distinguished: new entry
(in a field of employment not previously engaged in) and continuation of
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employment.

3. Institut für Gerontologie an der TU Dortmund
Who are Germany`s “silver workers” ?
 More younger than older retirees (between 65 and 70)
 More retirees with a comparative good health of state
 Many former self-employed (share of over 40 %)
 Many working in family run businesses (share of 30 %) (many of them
unpaid family workers)
 More male than female retirees
 Restricted lines of business (merchandising, service and transport sector)
 More typical so called-simple service jobs (watchmen, deliverers of
newspapers) than highly qualified jobs (e.g. consultants, senior experts,
twin-partners), however the latter with growing importance
 Precarious employment relationships the predominant form of employment
in the “silver work” sector (e.g. no standard contracts, in most cases
earnings restricted to 400 EUR/months; e.g. This true for all early retirees)
 For the majority of working retirees (share of more than 85 %) both part-
time work as well as flexible working time schedules are typical and –
besides others - one prime requisite for paid work after retirement. 3

4. Institut für Gerontologie an der TU Dortmund
The legal background for “silver work” in Germany
- How are additional earnings during retirement treated
by social and tax legislation ? (2012)
 (1) Before 65 (legal retirement age) (true for early retirees)
 additional earnings up to 400 Euros, no reduction of pension and no social
insurance contributions
 in case of additional earnings in excess of 400 Euros severe reduction of
pensions before 65 have to be accepted (in consequence de facto no use)
 (2) After 65 (true for all “normal” retirees)
 no restrictions on additional earnings
 however, social insurance contributions payable on additional earnings in
excess of 400 Euros (health and long term care insurance, statutory
pension insurance and unemployment insurance)
 In consequence individual pension entitlements to be increased through
work after 65
 (3) For both case groups income tax for additional earnings in excess of
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8,004 EUR p.a.

5. Institut für Gerontologie an der TU Dortmund
Motives and drivers for “silver work” in Germany I
 A mixture of different types of motives and drivers can be distinguished
which in reality very often overlap.
 Financial necessities which so far are only true for the minority of cases, are
of rising significance. Among them retirees with low pension entitlements
and many former self employed are overrepresented.
 In a rising number of cases reductions in pensions due to early retirement
(actuarial cuts) serve as a further financial incentive for paid work after
retirement. This is particularly true for those cases of early retirement due to
health reasons/reduced functional working capacity (“Erwerbsminderung”).
These early retirees in average have the smallest level of pension.
 In future a rise in significance of financial incentives is expected by all
experts.
 In this connection both the former and future official pension and retirement
policies in Germany as well as the increasing trend towards
“denormalization/precariation of work” (“working poor”) can be regarded as 5
strong drivers.

6. Institut für Gerontologie an der TU Dortmund
Motives and drivers for “silver work” in Germany II
 Empirical evidence also indicate individual “stroke of fates” with financial
implications (e.g.to pay for a sudden family-case of long term care).
 In some cases familiar reasons play an additional role (e.g. children still to
be financially supported).
 Currently, individual (intrinsic) motivations still dominate (like fulfilling an
individual “mission”, the wish to stay active, work as a personal and
individual challenge, as a tool for activity and self realization, to maintain
social contacts and to prevent social disintegration).
 In terms of motivations differences between low and high skilled pensioners
can be found: Intrinsic motivations are more found among the high skilled,
more financial necessities among the low skilled pensioners. Among the
latter group there is empirical evidence for pure existential need.

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7. Institut für Gerontologie an der TU Dortmund
Favourable prerequisites for “silver work” – employer`s
interests I
 No legal right for employee`s continuing former jobs after having passed
legal retirement age (65) (if not by contract individually negotiated) -
however this has been justified as de-facto age-discrimination by German
courts just recently according to the new discrimination legislation (in
political dispute)
 In consequence employees have to negotiate for a “silver work job”, what
must be wanted and supported by employers.
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8. Institut für Gerontologie an der TU Dortmund
Favourable prerequisites for “silver work” – employer`s
interests II
 Employer`s interests more or less circulate around business reasons like
regional, seasonal labour shortage, need for knowledge transfer, general
lack of qualifications, company’s demand for special vocational expertise,
very often oriented towards competencies of special (mainly highly
qualified) staff member
 From a corporate point of view, silver work often serves as a further
instrument of flexibility besides other forms of employment (such as
temporary employment, labour leasing, etc.) to adapt staff according to
market changes and needs with the additional benefit of low personnel
costs through employer`s exemptions from social insurance contributions
 Economic interests of employers in practice often stands in line with a
general positive attitude towards the special extrafunctional qualifications
(“soft skills”) of older workers
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9. Institut für Gerontologie an der TU Dortmund
Favourable prerequisites for “silver work” – employer`s
interests III
 In consequence paid work after retirement very often is organized both
either as both precarious 400 EURO-jobs or as contract management as
well as freelancing
 Problem is, precarious employment relationships in the area of work after
retirement very often suits pensioners’ interest in flexible working time, etc.
 Trade unions fear, “silver work” can develop to a new “business concept”
which might become increasingly important against the background of
demographic change on the labor markets as well as for qualified labor
shortage and misused against the “true” interest and needs of older
workers
 Case studies confirm that in certain lines of business employment of highly
motivated retirees helps filling the gaps in manpower derived from own
mistakes in personnel planning in the past
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10. Institut für Gerontologie an der TU Dortmund
Insights from case study-findings - promoters and
barriers of “silver work” in practice
 Legal and regulative incentives or disincentives (tax legislation, limits on
regular earnings in retirement)
 Organizational incentives/business reasons play a key role on the
supply side
 Overall labor market situation as a further important prerequisite
 Normative support by employers of high importance
 Adequate adapted working conditions
 Reducing of working hours, less physical job constraints and less work
responsibility, high degree of flexibility, reduced physical constraints
play a key role
 Majority of „silver workers“ in a comparatively good health status
 Further individual incentives refer to the family status, family situation,
qualifications, skills and particular vocational experiences 10

11. Institut für Gerontologie an der TU Dortmund
Current policy background for promoting “silver work” in
Germany I
 Recent Federal pension policy initiatives aim at promoting “silver work” by
both raising the upper limits on additional earning and by freeing them from
social insurance contributions. The most important arguments are:
 To fight age-discrimination according to Germany`s new legislation on age
discrimination (2008)) through reducing practical barriers (due to corporate
contracts as well as to social and tax legislation)
 “Silver work” is seen as one (of many others) answer to meet the expected
(qualified) labour market shortage
 “Silver work” is seen as tool to improve the individual income situation in old
age and to reduce the risk of poverty of future cohorts older people (against
the background of expected rising income risks of future age-cohorts (e.g.
due to involuntary early retirement, not fulfilling “pension with 67” (in power
since 2012), actuarial cuts for early retirement)
 “Silver work” is seen as “good practice” for the normative concept of active
ageing (2012 EU-year of active ageing) 11

12. Institut für Gerontologie an der TU Dortmund
Current policy background for promoting “silver work” in
Germany II
 However there is political dispute:
 Trade unions argue more silver work
 to be an attempt to create the ground for (compensating) further pension
reductions
 might contribute to keep the first labour market closed for those being
unemployed and looking for jobs
 Socio political scientist fear
 a further loss of reputation for the statutory pension Insurance (for not
being able to secure a sufficient level of old age income making many
people dependent on “work in spite of retirement”)
 Gerontologists fear
 A” silent” termination of the institution retirement age as the “well-earned”
and satisfactorily secured end of the normal working-career
 new forms of social inequalities in the process of retirement 12

13. Institut für Gerontologie an der TU Dortmund
Thank you for your attention!
Prof. Dr. Gerhard Naegele
Institute of Gerontology
at the TU Dortmund University
Evinger Platz 13
44339 Dortmund
Phone: +49 (0)231 728 488 0
Fax: +49 (0)231 728 488 55
E-mail: orka@post.uni-dortmund.de
URL: http://www.ffg.uni-dortmund.de
Prof. Dr. Gerhard Naegele | Dublin 02./03.11.2011 13