Are questions about retirement plans taboo?

Question: I have a number of workers in their mid 60s. Some of them are in key positions and losing them with a couple of weeks notice would be extremely problematic for my business. Am I allowed to ask them about their retirement plans or am I risking a human rights complaint if I do?

Answer: You can ask. Nicely. Only very occasionally. 

Allegations of age discrimination almost only arise where somebody has been asked repeatedly about their retirement plans and when there were none, terminated. An employee is not going to allege age discrimination if they are still working for you and nothing has happened to them. Nobody knows the future and you need to be very careful about how you proceed. If you end up terminating an employee after several inquiries about their retirement plans your goose will probably already be cooked unless you can objectively justify the termination for a shortage of work or something similar.

If you are going to ask your employee about their retirement plans you should do so while making it clear that you appreciate their contribution and hope that they stay for a long time. You should explain that you simply are concerned about succession planning for the business and are not trying to provoke their departure. If they say they have no plans for retirement you should thank them for their time and walk away and make thorough notes of the conversation. You should not ask them again for at least a year, perhaps a year and a half.

Some employers find themselves in a very difficult situation where an older worker is slowing down and not as productive as they once were. The employer would not mind if they actually decided to retire. Sometimes the answer you will get from this kind of employee is that they cannot afford to retire yet. That could lead to a conversation about how much of voluntary severance package they would need to take the leap. If you can come to a mutual agreement about an end date and a package it will need to be put in writing. The letter should make it clear that the employee is not being terminated and that the offer is being made only in response to a conversation with the employee where they expressed interest in receiving a package. It should say explicitly that the employee has not been terminated and is free to continue in their position. 

I have seen this become a game of chicken. The employee wants to leave and get as much money on the way out the door as they can but to do that they must be coy about wanting to depart. The employer would like the employee to move on but in order to avoid paying an arm and a leg by way of a voluntary severance package must hide their desire for the employee’s departure. It is a bluffing game. Once the dance is finished, if the parties have come to an agreement, make sure that it is all in writing and the employee signs a full and final release. 

If none of this works and you want to terminate an employee for poor performance I strongly recommend you start documenting job performance deficiencies and engage in a progressive discipline process. This will not save you from having to pay a severance package as you will likely never establish just cause for termination without notice. It will, however, provide a shield if the employee alleges that they were let go as a result of their age. You will be able to show documented discussions with respect to the work performance issues. Often that progressive discipline process will lead to a conversation about a voluntary severance package to put both parties out of their grief.

Finally, if your gut tells you the employee will have no interest in a severance offer and there are job performance issues, start documenting them without delay. Skip any questions about retirement plans as they may be used against you later.