By Allen Smith, J. D.
When older workers make vague assertions that they’d like to retire, immediately asking them to specify when may not be the best approach. Ignoring their assertions isn’t either. Following up later with low-key questions might be preferable.
“This is a very sensitive area,” said Robin Shea, an attorney with Constangy, Brooks, Smith & Prophete in Winston-Salem, N.C. “If the employer comes across as too aggressive when asking about an employee’s retirement plans, that could be viewed as age discrimination,” Shea said. “On the other hand, if the employer ignores a comment like this, it could be losing a good employee before the employer is ready.” That could hurt the business and morale, she noted.
Shea recommended following up in a reserved way and perhaps not in the moment.
Suppose an employee says, “Retirement can’t get here soon enough!” A day or two later, the employer might ask, “When you said retirement couldn’t get here soon enough, were you serious or were you just having a bad day?” If “just a bad day” is the answer, the employer should drop the subject of retirement and follow up about the reason for the bad day and any workplace-related solutions, Shea said.
However, if the employee says, “Yes, I’m ready to go,” the employer can follow up and possibly get more specifics about the employee’s plans—maybe even a date or time frame, she said.
“There is nothing illegal per se about asking the employee to set a retirement date, since the employee has already indicated that he or she wants to retire,” Shea said. “However, I don’t recommend doing it. If the employee hasn’t provided a date on his or her own initiative, then the employer’s asking for a definite date could be viewed as pressure, which could be used against the employer as evidence of age discrimination.”
Career Plans
Employers should not bring retirement up on their own, particularly with only older employees, because this also could be considered age discrimination, noted Anne Marie Schloemer, an attorney with Perez Morris in Columbus, Ohio. “An important distinction is that an employer may ask about career plans,” she said. “Obviously, there’s a clear business purpose for this, being succession planning.”
The employer could ask all employees about career plans as part of the performance process, not just older employees, she said. An example of this would be, “What are your one-, two- and three-year career plans with the company?” Schloemer said that if the employee mentions retirement in response, training of a replacement and succession discussions can take place at that time.
What if the Employer Wants the Employee to Leave?
If the employer wants the employee to leave and the worker has active discipline or is on a performance improvement plan, the employer may terminate the employee based on the discipline or poor performance but offer to treat it as a voluntary retirement, Shea said. The employer can terminate, and the employee can quit at any time when employment is at-will rather than contractual.
“That said, special care must be given to ensure that any termination decision does not run afoul of the requirements of state and federal law,” including the Age Discrimination in Employment Act, noted Sam Schwartz-Fenwick, an attorney with Seyfarth in Chicago. “Thus, it is optimal to only terminate an employee after they have gone through a performance improvement plan and failed to improve. This step creates an objective record that supports the ultimate termination decision.” As a practical matter, if the employee is performing adequately, there may not be much that can be done, apart from generous retirement benefits that may be incentives in and of themselves, Shea said.
What if the Employer Wants the Worker to Stay?
If the employee wants to retire and the employer wants them to stay, the employer should ask the worker if there’s anything that can be done to get them to stay longer and be open to the employee’s suggestions, Shea said. “The employer can offer inducements, such as a raise or promotion, in order to try to retain an employee for a longer period,” Schwartz-Fenwick said. Part-time employment or a post-retirement consulting role are other options, Schloemer said. It might help if the employer has an end point in mind—for example, long enough to complete a given project or until a successor can be hired or promoted and trained, Shea added.
Discussing Retirement Benefits
If workers ask about retirement benefits, HR generalists should refer them to the plan documents and the plan administrator, according to Schwartz-Fenwick. “The terms of the employers’ retirement benefits should be set forth in both the relevant plan documents and the summary plan descriptions,” Schwartz-Fenwick said. “[People who are not benefits specialists] should not try to answer these questions.”
However well-meaning, managers and HR generalists often end up misstating the terms of the plan, he said, adding, “Such misstatement can give rise to liability.”
