Just why are some organisations avoiding retirement conversations whilst others embrace it? Tony Clack, Managing Director of LaterLife Learning, and Lee Coles, Head of Money After Work at Jelf Employee Benefits, discuss. 

The need for individuals to be able to discuss the implications of retirement, and for organisations to provide retirement support has never been greater. Since the decision when to retire was put into employees’ own hands, there is no doubt that, while providing the welcome opportunity of personal choice, this has also provided many with a difficult decision. We are seeing a range of employer reactions to the removal of the DRA, some organisations are indeed recognising employee needs and adding to, or introducing, retirement support for the first time; some employers who have been pro-active in providing retirement support for years have backed off and are waiting for an employee to say they want to retire; whilst others rely on responses to passive intranet information, before being prepared to enter into conversations or offering any support.

Any employers adopting passive approaches are certainly not helping their employees and ultimately could be harming the organisation. Conversations with HR Managers of such employers show that their approaches are largely based on the myth that, initiating discussions about retirement could be seen as equating to age discrimination, or at least that such conversations are fraught with dangers. In reality, this is not the case, and as long as communications and conversations follow some basic principles, are in pursuit of a ‘legitimate aim’ and are 'objectively justifiable’, there is little risk.

Employees range from those who can’t wait to retire to those who are concerned or even fearful of retirement. Adequate finances may be a perceived barrier to retirement for many, but for many more it is about a lifestyle choice. Many don’t know how they will spend 40-50 hours of extra leisure time each week for the next 20-25 years in an enjoyable and fulfilling way. As a result, it is all-too easy to drift on at work, not making a decision, to the potential detriment of both the individual and the employer. Where channels of communication regarding retirement are not ostensibly open, employees can be wary about discussing any thoughts of retirement. They are concerned that to do so may raise a flag to the organisation that they are considering leaving in the near future, as opposed to just planning ahead.

There is a further complication when it comes to discussions specifically between employees and managers. For many years retiring employees have said to us that they haven’t been able to have a useful conversation with their manager because their manager is ill equipped to handle the discussion. Managers often don’t understand the full implications of retirement for people and the challenges and opportunities that they face. So what are forward-thinking organisations doing? The traditional pre-retirement course is a vital component for retirement planning and has assumed increased importance in helping individuals decide when to retire. For this reason, it is being offered earlier, to anyone within a few years of potential retirement. One of the advantages, as well as helping the individual decide, is that it turns what may otherwise be an emotional reaction to retirement into a logical decision, which engenders good decision making and good discussions within the organisation.

Some organisations are incorporating retirement discussions into ‘the future’ section of their appraisal process, so that discussions take place throughout employees’ careers, and it is possible to identify availability of assistance, whether financial or lifestyle, at the appropriate time. This is likely to increase in importance in the early career years, as the difficulty of financial planning for retirement has been increasing with the move to defined contribution pension schemes and general financial pressures. Placing this in the context of a good retirement policy and providing associated guidance for managers aids this. Others are also making more use of mid-life retirement planning courses, which are financially based and help individuals make adjustments to their financial retirement plans while there is still time. 

There are also increased discussions about offering basic financial education for employees early in their careers. The option of flexible retirement – where the employee can gradually cut down their hours – is also a valuable adjunct being used by some employers. It is one we expect will become increasingly popular over time. The bottom line is that there is a win-win for individuals and organisations in active retirement discussions throughout employees’ careers, and in providing specific retirement support at key stages