Retirement and Pensions
Retirement is another way in which an employment agreement is terminated, however, the effects of retirement are so much more for most people. As it is a dramatic change of lifestyle and social status; one day your working, the next your not!
As there is now no fixed age for retirement it is important for organisations to agree on the date and timing of a person's retirement. Many employers will assist their employees who have been long servicing with this transistion.
Generally, there it is the responsibility of the HRM to devise suitable retirement benefits for the employees. HRM at the time of recruitment itself has to foresee the career an employee could have. Therefore it needs to create an appropriate superannuation/pension scheme for the employees.
There are two forms of common retirement processes:
Early retirement: Which allows employees to retire earlier than the 'normal' retiring age. However, some organisations encourage this practice to reduce staff numbers, clear succession or promotion blockages.
Phased retirement: This a more widely used approach where the employer makes preparation for the employee to phase in the retirement to avoid the abrupt change in circumstances, by reducing their workload over a period of time agreed, so that they withdraw gradually from the organisation and full time paid employment.
Please note that it is unlawful under the anti-discrimination provisions of the Human Rights Commission to require an employee to retire on the grounds of age, therefore no employer can state in employment contracts or policies an retirement age.