)
After a hard day at the office, a few of us will admit to fast-forwarding our lives to the moment we retire. At times we crave freedom and wallow in the thought of not having to get up early every morning.
But when the time comes for us to consider retirement it throws up many feelings unexperienced before and a multitude of questions. Can I can afford to retire? What are my options? Will I maintain the same lifestyle?
For an employer, losing a member of staff with potentially decades of experience can have a negative impact so it’s important to recognise the importance of succession planning to future-proof businesses too.
The transition from work to retirement
There are four main issues to consider when helping a member of staff with their retirement plan:
The number of people over the state pension age choosing to remain in employment continues to increase every year.
Hold any retirement discussions early to allow both yourself and your employee to be better prepared.
Understand age discrimination.
Ensure your employee knows their pension options to allow them to fulfil their future financial wellbeing.
Retirement age
Older employees can voluntarily retire at any time. Employers can only set a specific retirement age when it can be justified; known as a ‘proportionate means of achieving a legitimate aim’. For example, employees where a high level of fitness is needed to carry out their role may be subject to an “employer-justified retirement age”.
Understanding pension options
It is the duty of an employer to ensure individuals understand what they have invested in leading up to their retirement.
Running workshops could be a great idea. Encourage all employees to attend, not just those thinking about their retirement. Planning for this stage of life should not be taken lightly and providing this information will give all individuals a realistic picture of when they will be able to retire.
Or, if your business is fairly small and running workshops isn’t a possibility, then ensure you know what to tell your employees when the subject crops up.
So, what will the employee need to understand before comfortably making a decision on when to stop working:
Their retirement aspirations.
The possibility of phased retirement. There may be an option to move from full time hours to part time hours before the actual retirement.
Ensuring all options are understood including the financial impact of retiring early or later.
Understanding all aspects of their occupational pension.
How to calculate if the projected income meets their future needs.
Who to see if they need more advice.
Discussing retirement plans
Retirement planning experts recommend employees speak to individuals five or 10 years ahead of the time they expect to retire. Make sure to tread carefully, you don’t want to put yourself at risk of age discrimination. Here are our tips to a successful discussion:
Do not single out older workers. Ask all of your workforce about their future aspirations during one to one meetings and annual reviews.
Do not talk directly about retirement. Steer a conversation with language such as ‘how do you see yourself developing in the business over the next couple of years?’
Should the employee mention that they are considering retirement, then speak openly about this. Over time, help them plan for their retirement and establish when they will stop working or take a phased approach and reduce their hours.
Succession planning
Succession planning goes hand in hand with retirement planning, after all, when a person retires it leaves a huge gap in skills and experience.
Continual training and development of all employees ensures that all key roles have someone available to take over the role. Following successful communications with all employees, a business should be given plenty of notice for when an older member staff leaves – this will allow time to bridge any skills gaps.
You read, just a minute ago, that employers should ask ALL employees about their aspirations for the next year or so. This information doesn’t just invite the older members of staff to discuss any potential retirement plans, it also paves the way for other staff to keep their managers informed of their plans for progression.
Communicate, communicate, communicate
All successful businesses communicate effectively. Spending time getting to know your employees, recognising their development wishes, understanding their future plans and meeting their needs will go a long way to create a healthy, happy and loyal working environment.
How we can help you
If you’d like to discuss any of the issues detailed in this blog, get in touch with us today. We’re here to help.
)