How to Handle Employee Retirement

Date: Friday, 28th February, 2020

With people living longer and remaining fitter and active than the generation before, many workers wish to continue to work long past the age they can claim their state pension. This, coupled with low levels of private pension provision across the UK is forcing employees to stay in their jobs later in life.

These two factors, combined with legislation prohibiting age discrimination and promoting phased retirement, where individuals move from full-time to part-time work before full retirement, have had the effect of increasing the number of older workers.

While some employers find the expertise and experience of older employees valuable, longer working lives can also create challenges for organisations when it comes to succession planning.

Older employees should expect to be treated in the same way as younger employees and should not be discriminated against or forced to leave because of their age. However, they can still be selected for redundancy, disciplined for performance, or dismissed for capability as long as this isn’t age related.

An employee may choose to retire voluntarily at any time and this should be treated in the same way as a resignation. Usually, when an employee wishes to retire, they should give you the normal contractual notice they would if they were resigning.

Alternatively, the employer can choose to introduce a voluntary retirement policy and include a requirement for a longer period of notice. If there any special notification requirements for retirement outlined in the contract of employment, such as a requirement to submit a formal retirement notification in writing setting a date on which their retirement will commence, the retiring employee should comply with them, too.

It would still prove beneficial for any retiring employees to take part in an exit interview as would be the process for a normal leaver. Although the reason for leaving is known, you should still take the opportunity to learn about their experiences within the organisation.

Often an employee will be looking forward to the date that they can retire and want the process to be managed well.  An employee may wish to discuss their retirement options before they have taken the decision that they would like to retire.

If the employee has not given you a clear notice of retirement, then you should not treat such discussions as notice. If an employee later changes their mind, they should be allowed to continue their employment without any pressure from their employer.

Speaking to employees early about their retirement plans can be beneficial to both the employer and the employee. However this doesn’t mean that employers should be asking every member of staff in their early sixties if they want to see a financial adviser about retirement planning, as this would be classified as age discrimination!

Even though employers cannot force employees to retire or set a retirement age for the whole workforce, many retirement planning experts would still recommend speaking to staff about their options when it comes to retiring and answering any questions around pension provision, however this shouldn’t be exclusively targeted at any specific age group and should instead form part of wider communications to all staff.

We can help you strike the delicate balance between legal protection and minimising the impact a leaver may have on your team, to avoid a potentially negative experience. 

Ensuring a smooth exit for leavers will give you peace of mind that your ex-employee is happy with the process and your business is protected. If you would like to discuss this or any other HR issues, please get in touch.

Contact us at hello@hrrevolution.co.uk or call 0203 538 5311.

 

 

 

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