When an employee retires

Providing support for a retiring employee

For many people, retirement can be a difficult period. It can bring with it all sorts of emotional and financial challenges. There are a number of ways in which you can help an employee to make the transition from employment to retirement, including:

• Gradually reducing their working hours for a period of time before the retirement date, preferably on full pay. This will give the retiring employee a chance to develop other interests outside work.
• Providing early opportunities to attend a pre-retirement course for counselling and/or financial advice.
• Giving the employee the opportunity to work past retirement age if they wish. This could include flexible working options. You may need to take professional advice about the employment contract and how it affects their occupational pension if you do this. See our guide on the employment contract.

You should be aware that under new age discrimination legislation in October 2006, employees will have the right to request to work past the age of 65, which the employer must consider.

This legislation will:

• set a default retirement age of 65, unless the employer can provide an objective justification for one lower than this
• stop discrimination in recruitment, promotion and training
• remove the upper age limit for unfair dismissal and redundancy rights
• require that employees are given at least six months' written notice of their intended retirement date

However, people under 65 will still be able to retire early if it is permitted in the legislation and the occupational pension scheme rules. The new changes do not affect the existing State Pension age.

You can read a copy of the draft Employment Equality (Age) Regulations 2006 and consultation document on the DTI website.

The Age Partnership Group provides employers with help and information to help them prepare for the introduction of age discrimination legislation in October 2006. Find information on new age discrimination legislation at the Age Positive website.

Subjects covered in this guide

• Introduction
• Retirement - the process to follow
• Pensions and retirement
• Providing support for a retiring employee
• Ill-health related retirement
• Early retirement

 

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