Retiring employees can leave your company in the lurch, as you scramble to find a replacement for the soon-to-be retiree and ensure that the retiring employee doesn't take all his job-specific knowledge with him when he leaves. A retirement notice policy can help you ensure a smooth transition when employees retire -- for both your business and the retiring employees.
One key function of a retirement notice policy is to give the employer a sufficient amount of time before the employee retires. While it's common for employees to give their companies two weeks' notice when they're leaving their jobs, retirement notice policies often require a month or more of advance notice. A longer notification period is necessary since a retiring employee typically indicates a long-term relationship with the company, with some employees in management positions. In many cases, more succession planning is necessary.
Employees can typically choose their retirement date, as long as it's in accordance with the company's specific requirement of advanced notice. Setting a date in stone allows the company to plan human resources functions that must take place on the employee's last date, such as deactivating an access key card and conducting exit interview. Plus, it tells managers exactly when someone must be in place to take over the retiring employee's job duties.
Your retirement notification policy should explain how an employee is to notify your company of his impending retirement. Most companies require that an employee do this in writing. Your policy should also clearly state who is to receive this notice -- usually a human resources representative or direct manager. Your policy should also outline what happens once an employee submits a notice of retirement, so he knows what to expect. This may include meetings to discuss his job duties and share knowledge about his position.
If an employee participated in a pension plan, a retirement notice policy will also say how much notice an employee must provide to the company to begin receiving pension payments. Companies often begin making pension payments a month after the closest first of the month following the retirement date. However, this is not always the case. If retiring employees are counting on their retirement benefits to fund life after work, an explanation of how to begin getting their pension payments as soon as possible can help them ensure a smooth financial transition into their golden years.