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Retirement - Essential Steps for a Smooth Transition

Retirement - Essential Steps for a Smooth Transition

With the announcement that football management royalty, Sir Alex Ferguson, will be hanging up his gaffer's hat and settling down to a life of retired bliss, my thoughts turned to the employment aspects of retirement and how an organisation can support an employee during this period.

Unless it can be objectively justified by your organisation, it is no longer permissible to dismiss someone on the grounds of retirement. Like Sir Alex, older workers can voluntarily retire at a time they choose and draw any occupational pension they are entitled to at this point.

Since the abolition of the Default Retirement Age in October 2011, employers cannot force employees to retire or set a retirement age unless it can be objectively justified. Instead the following approach should be adopted:

  • Discussions surrounding an employee's intention to retire should form part of an overall review regarding their future aims and development needs.
  • You should never ask a direct question such as 'when are you retiring' Whatever the age of the employee, discussing their future aims and aspirations can help an employer to plan effectively. These sorts of discussions could perhaps take place within the formal internal appraisal system and the outcome of any workplace discussions should be recorded and a copy passed to the employee.
  • If the employee indicates that they wish to retire, there is no problem with discussing this with them and discussing any arrangements leading up to retirement.

A common problem faced by organisations involve older workers who are seen to be under performing. Any employer who has an employee in this position should:

  • Discuss the issues with them to establish the reason behind this.
  • Failure to address any poor performance because you think the employee may retire soon may be discriminatory.

Employers should establish a reason for poor performance, setting improvement periods and agreeing what training and development would help the employee meet the business expectation. If levels are not improved and an employer has followed the company's performance procedure they then may decide to dismiss the employee on capability grounds.

By following these steps you can hopefully have an employee retire in a smooth and happy way at a time when they want to. 

Authors

TC Young

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