When it comes to ending our working lives, there may be no such thing as a ‘normal’ retirement age, according to the employment team at leading offshore law firm, Mourant Ozannes.
At a seminar held this week, Mourant Ozannes partner and head of the Jersey Employment team, Helen Ruelle set out how the landscape has changed in relation to the way the traditional ‘working life’ comes to an end, and led a discussion on how Jersey businesses need to consider their long-held positions on retirement.
As the working population gets older and approaches retirement, the goalposts keep moving. In Jersey the retirement age is set to rise from 65 to 67 between 2020 and 2031. Statistics also show that people are living longer and are therefore able to remain economically active beyond the popular retirement age of 65. Life expectancy has increased dramatically since Otto Von Bismark, Germany’s ‘Iron Chancellor’, picked 65 as the ‘Golden Age’ for retirement in the late 1800s. At that time people were not expected to live much beyond that age, but now they could expect to be alive well into their mid-Eighties.
Helen Ruelle told the audience of HR professionals and business leaders that because of a number of factors including better healthcare, life expectancy has increased considerably with nearly 15% of adults in Jersey who are over what is traditionally considered the working age, still economically active. The result being that when we become unable to work does not necessarily coincide with when we become unwilling to work.
Helen Ruelle commented that the older generation are talented people with a great deal to offer and, in many cases, their skills are necessary to keep a business performing. For the employer this creates opportunity and risk: the opportunity to benefit from continuing skills and experience within the business, but the risk that the employer’s practices, terms and conditions and other employment policies fall out of kilter and that the health of older employees potentially becomes more of an issue in relation to their ability to perform the role expected of them. It is essential, the audience was told, that employers consult early with their soon-to-retire employees and constantly review their employment documents to ensure they remain appropriate.
One of the key issues discussed at the forum was the need for businesses to adequately plan for leadership succession. If several senior executives are due to retire at around the same time, how should a business cope with that transition? A number of solutions were proposed, including staggering retirement dates of senior personnel by offering extended fixed term contracts and consultancies. Delegates identified the need to minimize the risk of claims under employment law and discussed offering employment beyond the current normal retirement date but agreed a balance needs to be struck between retaining experienced people and giving opportunities to younger employees.
According to Helen Ruelle, it is a question of identifying potential leaders of the business as part of strategic planning and enabling them to develop sufficiently to deliver a smooth succession when senior executives eventually retire.
Helen Ruelle said: ‘There is an historic assumption that people want to retire as soon as possible but, in reality, is that what people really want? We would suggest, possibly not. It is absolutely key that employers review their policies and procedures on a regular basis to ensure they are up to date with current legislation. Our view is, if you have a contract with a member of staff, you must ensure it covers what you want it to cover, and that it clearly explains how the relationship will come to an end. You should not wait until the employee’s 65th birthday to start discussions about retirement, or staying on. That conversation has to begin much earlier so that everyone understands where they stand. This is particularly important now because we live longer, and more people want to continue in employment.’