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The Transition into Retirement


An aging Canadian workforce with a less defined retirement age is causing a number of HR problems for employers. Following the abolishment of mandatory retirement in 2006, Canadians are now working well into their 60’s and 70’s, and even 80’s and 90’s before calling it quits. While many prefer to retire at a more conventional age, a growing number of seniors are continuing to work and be valued members of organizations well into their twilight years. Now, as a large portion of these boomers begin to exit the workplace, employers must be increasingly mindful to avoid age discrimination and ensure a smooth transition.

In practical terms, age discrimination is most likely to become an issue because of the principle of reasonable notice. This principle requires companies to provide an employee with an adequate severance package that takes into account his or her length of service, the type of employment, their age and their ability to find a comparable position. For many older employees this often adds up to a sizeable severance package. In recent years, disputes over the size of severance packages have gone to court and an inability to find employment because of advanced age actually increased the amount awarded.

To prevent these issues and ensure a smooth transition employers should understand a few things.

1.     Possibly the most important and easiest thing to do is to simply talk with your employees.  By having an open conversation early you can discuss how to achieve the objectives of your company while also meeting the needs of the transitioning employee. Conversely, the worst thing to do is avoid these conversations because they may seem slightly uncomfortable.

2.     Further to that, it may be worthwhile to actually involve the employee in the transition process. Not only will they appreciate the chance to have a say in when they exit and how, but it will also benefit your organization when dealing with losing an integral piece of your company and finding/training a replacement.

3.      It is also important to note that the transition process may be more successful if it is not a “one size fits all” plan for all employees. Each of your employees is unique and depending on some of their individual goals like retirement savings and quality of life they may benefit from having some flexibility in the length and structure of this transition period.

Lastly, keep in mind celebrating an outgoing employee for their years of service. People spend a significant portion of their lives at the office and a retirement should not simply be viewed as a termination of employment. Celebrate the new chapter they are about to begin and both the outgoing employee and your current team will appreciate it.

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