Broaching the Subject of Retirement with Employees

Document created by 1002070 on May 26, 2015Last modified by 1002028 on May 31, 2015
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Pat Rountree.jpgWith the number of baby boomers in the workforce, the question often comes up “Can we ask Tracy when s/he plans to retire?”    Just to be clear, although social security has a retirement age to qualify for benefits, there is no mandatory retirement age for most employees.  (Some exceptions exist for airline pilots, federal law enforcement officers, firefighters, air traffic controllers, and bona fide executives or high policy makers (see Compliance Manual Chapter 2: Threshold Issues).

 

So can you ask employees about retirement and if so how?  The short answer to this question is a qualified yes, as long as you handle it appropriately.  When done wrong, particularly if you badger the employee, mention "generational words," or when a supervisor keeps asking, pushing, and treating someone badly for giving a “wrong answer."  The time and place also matter.  If we never ask the question and all of a sudden start asking all of our employees over 55 when they plan to retire could at the very least cause a morale problem.

 

Nonetheless, there is nothing inherently wrong with asking any employee about their future plans, and companies need to know that information for many reasons.  The fear of being accused of (or sued because of) age discrimination sometimes makes employers hesitant to ask about retirement.  So in what ways can you broach the subject of an employee's retirement plans?

 

  • When someone has mentioned they are thinking about retirement, you can ask them if they have a date in mind and that you would appreciate if they would give you ample notice to find someone to fill the job and perhaps have them train the person.  If they are not receptive or do not have a date in mind, be sensitive and follow-up in an appropriate way at a later time.
  • For workplace planning purposes, especially in key positions or those that have a longer learning curve/training period in job specific methods.
  • Through a policy that says if you are planning to retire, please give us as much notice as possible so that we can discuss options for training someone to flll the position as well as options for phased retirement (if that is something the Company would consider).
  • Through voluntary early retirement incentive plans that offer a severance to employees who meet a minimum age and number of years of service with a company and elect to take the package.  These should be carefully developed keeping in mind the needs of the business and compliance concerns.  They are generally used when a reduction in force is required and in lieu of an involuntary RIF.  An employment law attorney should be consulted in drawing up such agreements.
  • But what about when you have a great employee you hate to lose but you sense retirement may be in the cards?  In this case, ideally the person having this conversation with the employee has a good relationship with them and ideally that would be the manager.  The idea of retiring is stressful for many employees so we want to be delicate.  The annual review is a good time to venture into this territory particularly when discussing plans for the next year.  You can simply ask, "So Ted, what are your plans for the next year" and see where the conversation takes you.  You are asking merely for planning purposes.  Again, don't push or badger them for an answer.  You just want to open the door.  It's ok if they don't want to walk through that door now.

 

Options for a smooth transition for the company and employees who plan to retire may include offering phased retirement, where employees gradually reduce their hours as they continue to work part-time until full retirement or while they train and transfer knowledge.  Also, upon receipt of the unexpected notice that an employee plans to retire, the company may offer incentives to retain the employee through a training period for a new employee filling their position (be sensitive to the term “replacement” as no exiting employee wants to feel like they can be easily replaced).

 

Whatever the case, employers should always be prepared for employees leaving, whether through retirement or leaving for another job.  Workforce planning should be an on-going strategy, documenting processes, cross-training where applicable, and maintaining succession plans (see https://my.capital.org/docs/DOC-2850).  Absent a contract, employment is at-will (either the employee or the company can end employment at any time).  So why should notice of retirement be any different than an employee’s choice to take another job and give notice? The point is, don't get caught off-guard.  Be prepared whatever the reason.

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