Although every large corporation has its own way of dealing with retiring leaders, our experience at Sibson Consulting has been that many corporations take the paternalistic approach mentioned in the question. This approach benefits both the retiring leader as he or she prepares for retirement and aids the organization by smoothing the transition to the next leader.
Employees who expect to be financially secure in retirement are better prepared emotionally. Corporations can nurture this sense of security by providing financial planning services that help ensure that the retiring leader’s financial house is in order — that retirement savings are prudently invested and all benefits from the current and perhaps former employers are coordinated and accounted for. This will allow for a smooth transition into retirement for the outgoing executive.
Helping leaders prepare for retirement can help the corporation, too. A leader’s retirement must be carefully communicated to employees and his or her successor must be introduced in advance of the retirement date. If this is well-planned and executed, productivity will not be affected. A strategic approach to succession management helps create a flexible, high-performing organization and ensures that open positions do not impede the progress of important business initiatives. Of course, an organization's ability to retain key employees through any kind of leadership transition is a critical competitive advantage in today's economy.
SOURCE: Richard Reed, vice president and defined contribution practice leader, Sibson ConsultingASK A QUESTION
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
If you have any questions or concerns about Workforce.com, please email firstname.lastname@example.org or call 312-676-9900.
The Workforce fax number is 312-676-9901.