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While New Zealand does not have an official retirement age, most working adults will aim for 65 years of age as this is when NZ Superannuation is paid by the Government and superannuation plans (eg KiwiSaver). The most important piece of information on retirement is that you cannot force an employee to retire, except in very limited circumstances.

Planning for retirement.

Retirement is a natural end to employment and, in a similar method to resignation, should be managed to minimise disruption to your business and to promote a positive environment in the workplace.

One of the most mutually beneficial ways of managing retirement is to encourage a phased retirement. This ultimately encourages the employee, or employees, to think about their retirement planning and how they can ensure they leave the business with minimal disruption. Your efforts to support this can only be viewed as a positive by employees.

Importantly, when the time does come for an employee to retire their final pay should be calculated and the correct process as outlined in any workplace policy should be followed.

Can an employee be forced into retirement?

Discrimination based on age can be an issue raised if an employee feels they were forced to retire, however if carefully managed there are some exceptions to the rule of forcing an employee to retire.

If your workplace has employees covered by an employment agreement which was created before 1 April 1992, this agreement may have an age of retirement specified. This was a lawful provision in employment agreements, however both you and your employee must have agreed to this in writing on or before 1 April 1992 for this to still be effective.

There are some other exceptions to this rule, only encountered in certain situations, such as positions outlined in legislation like judges or coroners which have a clear age limit before forced retirement.

Forcing an employee into retirement.

If an employee feels they have been forced into retirement they can raise a personal grievance and the investigation and decision on the outcome will likely be done by the Employment Relations Authority and can be an expensive process.

For support on managing retirement, or for advice on how to incorporate a clause into your employment agreement, contact Employsure day or night on 0800 675 700.

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