Retirement Policy

TN Banker · October 2005

Can your retirement policy include a retirement age? Can you require that employees retire at age 65?? If so, I need help on implementing a revised policy. Also, if we can set an age for retirement in our policy, can this also include the ones that are already at or past this age.

We have employees that are past retirement age and are still hanging on. They are over paid for the amount of work that they can do. How do you handle this?? We do not want to discriminate based on age, but these people need to move on.

Any advice would be much appreciated. Thanks
TN Banker

TN HR · October 2005

"We have employees that are past retirement age and are still hanging on. They are over paid for the amount of work that they can do. How do you handle this?? We do not want to discriminate based on age, but these people need to move on."

It seems like you already have started the discrimination machination (hey, that rhymes). As long as the employee is able to perform the requirements of the position, then they can hang-on as long as they want. You may want to offer them some sort of monetary incentive to retire, but check with legal counsel on that.

Gene

Shadowfax · October 2005

Gene's right. If you have made that comment to anyone, even other managers, it may come back to haunt you. What you have is a performance problem to be dealt with as any other performance problem, just be sure you arn't more harsh with the older non performers than the younger non performers. The answer to your specific question is that generally, you cannot require retirement at a specific age before 70 (I believe) unless there is a bona fide occupational qualification for it, ie airline pilot, etc. There are some situations where there is a bit of leeway (I think CEOs or Presidents or something) but for the most part, age is irrelevant if the job can be performed satisfactorily. Check the ADEA section 12.

TN Banker · October 2005

Thanks for your response - The comments that I have made in this forum would never even be whispered in the hall of our institution. For what it's worth, this is for educational purposes only.

We know that we have performance issues, resistants for change, memory problems and overpaid salaries. We have these problems among employees of all ages. But, do you consider it discrimination to decrease a salary on someone who has been employed for 25 - 30 years, and is now an underachiever with performance problems and could not function or carry out their daily task without the help of others??

What do you do - tell them they are just not performing as they use to and in order to keep a job (one with lesser responsibility), they will have to take a cut in salary??? At some point you run out of mickey mouse jobs for these people to do and have to let them go based on performance.

I don't want to hurt anyone or discriminate. I'm just looking for the legally right and professional way to handle these kind of issues.
Will appreciate any comments.
Thanks

Gillian3 · October 2005

If you want to move ahead, and only do so if you have top management support, obtain the assistance of a labor attorney. It sounds like you have a big problem, and with more than just one under-achieving employee.

Whatever · October 2005

You have performance problems not age problems. You should be treating all performance problems the same (no matter the age). You do not indicate what has been done up to this point (performance reviews etc.) You seem to talking about correcting a situation that could appear and/or actually involve age discrimination. You need to talk to a lawyer.

Gillian3 · October 2005

There is no maximum limit, except for pilots and a few other jobs, where there are regulations which trump Title 7. You can enforce performance standards so long as they are enforced equally. You can also offer an early retirement program, but one you get into arm-twisting you have entered the discrimination arena.

HRinFL · October 2005

Not long ago, we changed our philosophy on compensation. Instead of it being a case of "if you stay here long enough, eventually you will reach the max for your position," we ties to to performance. It was a radical shift for us, because of the business model that we have and the philoshopy we have developed. However, as a company with many long term ees that were content to do the bare minimum, we had to adjust our structure to remain competitive. So, for each job class, the pay structure is divided into three levels: competent/successful (Average), superior (Above avergae, and role model (Excellent). If a job has a pay range of $7.00 to $13.00, the level one pay would be $7.00 to $9.00, level two $9.00 to $11.00, and level three $11.00 to $13.00. To move from one level to another, you must receive a total rating on your evaluation that would place you in that level. If you receive pay in level two, but have two consecutive evaluations at level one, you are dropped $.25. You will continue to drop until you return to the next level on your evaluation. We developed guidelines fro all managers to use and they must justify each rating. It was met with some resistance, but ees quickly learned that it is consistently applied and that it has resulted in some that were not pulling their weight to become more productive.

pork1 · October 2005

TN BANKER: I am quickly approaching that 65 age identifier, We have no age limit and the company ownership has assured me that I can stay on for as long as I am productive, regardless of my age. I hope I can continue to serve and be productive. When I find myself being professionally non-productive I will move on, but not until then. I have an assistant who has taken over all of the technical functions of HR. I handle policy, procedures, and legal issues for the company. The legal issues I took away from our retained attorney collecting $175.00 an hour in 15 minute blocks. The legal fee is now up to $275.00 an hour. Our company was paying a lot of front time, now they pay me at $16.00 an hour whether I work on legal issues or just enjoy the HR Forums.

In each individuals situation, the senior leadership needs to discuss their honest and forthright beliefs of the abilities of the concerned person for team participation. We had one that was a department manager and he elected to retire and shortly, thereafter, we re-instated him as a facilities maintenance team leader and gave him a wage rate fitting of his productive worth. He is happy and works very hard at keeping two oprating plants up and working. With O/T he is now making more than he did as a Director of a department. He is paid by the hour and for the first time in his life he is getting O/T and loves it; plus his benefits continued.

Do not force out unless the issue is performance, then deal with it!!! Taking away non-productive task and responsibilities should not be difficult unless we have always provided an inflated evaluation. Then you have problems with ADA/AGE discrimination!

PORK

gismo · October 2005

I think if you haven't been already, you need to be addressing and documenting the performance issues, it doesn't sound like age really needs to play a part in this if the EE is really not performing as paid to.

mbeam · October 2005

We've run into this as well with a person that has effectively retired but continues to come into work each day believing that due to her longevity here that we somehow owe her.

If she was performing it wouldn't be an issue, however she is not meeting our expectations. We have treated it as we would any other performance issue and have documented it along the way consulting with our attorney about the best way to handle.

At one point, she did raise the issue of age discrimination but when the CEO and I met with her to get specific examples, she didn't have any.

She is on her final warning and well aware that if her performance doesn't improve that she will no longer have a job here. We're done being the nice guys and transferring her to another area to become their problem as has happened over the years.

She had talked about retiring over 6 years ago so my recommendation is to address the performance now. If there are problems they tend not to get better as time goes by. Our trying to be "nice" sure hasn't paid off as she's become more dug into a sense of entitlement not less.

njjel · October 2005

Do you do annual performance evaluations? If so they should indicate the ee's poor performance and means to correct same. If the performance does not improve significantly, and you have it documented, then you should take appropriate steps to terminate the ee. Meaning, give the ee a verbal warning, then a written warning, etc. and then if no improvement termination would be in line. However, as suggested above, you may wish to contact your labor counsel as well. good luck.

Retirement Policy

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