The term “phased retirement” is used to describe several work options, each with distinct requirements and implications for employers and employees:
- True phased retirement enables a steady reduction in percentage of time worked over several years, e.g. year 1-90%, year 2-80%, etc.
- Partial retirement is a reduction to a static schedule, e.g., 80% or 60%; both options typically include reduced salary and full or prorated benefits
- Contractor status is commonly referred to as a form of phased retirement, but is more accurately a retire/re-hire arrangement without benefits.
The process below applies to requests for phased and partial retirement.
Few employers offer phased and partial retirement. A successful request depends on careful diagnosis of your work environment and a systematic, business-oriented proposal. We recommend the following steps:
1. Assess your environment
Among the factors to explore: Is there a practice of supporting part-time work? Do any phased retirement arrangements exist? Is HR supportive of such a practice? Can HR identify potential barriers posed by any pension plan or other restrictions? Is your manager open to reasonable, if uncommon, business proposals?
2. Start with your employer in mind
You no doubt have good reasons for proposing phased retirement. Your manager and employer will approach this process with their needs and concerns in mind, not yours. To succeed, it’s important to identify and address their potential issues. Among the considerations should be:
- How can your proposed schedule solve rather than cause problems for the business? Does it help lower staffing costs? Will it enable retention of proven talent in times of tight labor markets? Can it create serious mentoring opportunities for new staff? Will it allow a re-prioritization of work?
- Do you possess valuable and not easily replaceable knowledge and experience that if not captured will leave with you upon regular retirement?
- Can your open collaboration on your departure trajectory enable superior succession planning?
- What worries your manager about such an arrangement : The difficulty of your making the transition from a full-time to a reduced commitment? The failure to adhere to hopeful mentoring plans?
3. Develop a written proposal In addition to making the case for the potential benefit of phased retirement to the employer, at least two detailed plans should be developed:
- Work redesign. A common fear among managers and employers is that a long-term, well-compensated employee on a reduced schedule will cut back on essential elements of the job making them “more expensive.” A valuable exercise is to analyze your job and identify its highest value elements and demonstrate that those will be prioritized over less valuable ones. The point is not to suggest that portions of your job have no or little value, but to maximize the use of your reduced schedule.
- Knowledge transfer. While more and more employers are recognizing that in today’s economy, significant intellectual property and business knowledge resides in employee’s minds, it is not clear what knowledge matters and how it can be shared and transferred. And once identified, the systematic and reliable transfer of valuable knowledge from the pre-retiree to other employees often proves elusive. A clear plan including deliverables, means of transmission and recipients of various forms of knowledge can be reassuring to managers and an excellent management tool.
4. Submit your proposal, set a conversation
Managers don’t like surprises and are used to reacting to written proposals. It’s best to give your proposal to your manager to allow him or her to review it, potentially share it with others for feedback—and to see how seriously you are taking the business and the idea. Schedule a later meeting to discuss your proposal.
5. If accepted, plan regular evaluations
Your written plan should include an evaluation component that can be reviewed and modified in a conversation with your manager. Regular evaluation will reassure the manager that the plan is being carefully implemented and allow any modification that might be needed. It will also increase the likelihood of your arrangement being successful.