Retiring bit by bit may be the answer

By JULIE MIDDLETON

This is Wellington's Dr Keith Lewis, a marine geologist for 39 years, talking about what triggered his plans for retirement: "I think you get a number of wake-up calls. No one thing.

"The death of close friends of your own age - my wife for one - makes you conscious of your own mortality. Like 'what else is there in life?'

"Work five days, jobs all Saturday, all the pleasure things in life squashed into Sunday.

"Sure, exploring bits of the planet that have never been explored before [as a marine geologist] is a fabulous way of earning a living - but how about all the other things I keep putting on the back burner?

"The trekking in Nepal, the cottage in France, the house-truck around New Zealand? All impossible with only a few weeks annual leave ... "

And there was another epiphany: "Realising that you aren't really as good at your job as you might have been once. Just not at the cutting edge any more."

In arranging a phased retirement from the National Institute of Water and Atmospheric Research (Niwa) - essentially a gradual withdrawal over several years - Lewis, whose work focuses on the structure of the east coast from Kaikoura northwards, has started doing something about life after work.

He was keen for three years part-time before retirement but eventually agreed with a "very helpful" Niwa that he work 20 months at three days a week.

That's due to end in June, when he's 62. He's hoping for a short extension to finish a few projects. Then he's a free man.

In the run-up to retirement, the plan "has effectively trebled my spare time," says Lewis. "I now have Saturday, Sunday, Monday and Tuesday to do all the things I want to do.

"True, the last 18 months have been setting up systems for future life. Downsizing to a town pad and turning part into a rental flat, and a project restoring a Victorian villa in the country. Plus seeing more of the gorgeous grandchildren."

Niwa human resources director Susan Boyle says Lewis' gradual withdrawal has allowed time for succession planning and permitted projects, often time-tied and subject to outside funding, to be completed.

With the money that Lewis is no longer drawing, a post-graduate student has been employed and Lewis is mentoring him, passing on knowledge.

Employers have to start getting to grips with staff retirement in more creative ways. Human rights legislation now forbids forced retirement at a particular age - many employment contracts used to make 65 the end of working life.

Although it's still possible to negotiate a retirement age, few employers will entertain that for fear of eventually running into difficulties.

The current skill shortage will be exacerbated as baby boomers start retiring, forcing companies to work out how to keep mature workers' talent available for longer.

There are various ways a win-win plan can be forged, says Joceline White in her guide Smart Business and Older Workers (available from the EEO Trust).

She advocates flexible arrangements allowing a gradual exit - attractive to the worker for health, family, and leisure reasons, and giving the employer a chance to shepherd the transfer of knowledge and skills, possibly reduce costs, and be seen to be flexible.

Phased retirement involves a reduction in hours, a shorter working week, or a move to part-time work.

Rehearsed retirement involves leave without pay as a trial run. Job-share returns bosses "twice the brainpower".

White also urges companies to support job-training or job search - maybe by calling on contacts - if what a would-be retiree really needs is a less demanding job.

Trawling around public and private New Zealand organisations, you find that scant attention has been paid to staff retirement issues since human rights laws outlawed forced farewells at 65, and apart from the armed forces, which offer resettlement programmes for staff heading to civvy street, there are few with formal retirement policies.

Even the number of companies offering subsidised superannuation has slumped to just 17 per cent, says White.

For many bosses, their contribution starts and stops at paying for staffers to attend seminars covering retirement issues such as superannuation, lifestyle advice and wills.

That market is cornered by Auckland company Retirement Planning Seminars NZ, which has put about 50,000 New Zealanders through its one-day programme in the last 15 years on behalf of companies, according to manager Peter Fleming.

Staff who want to phase themselves out appear to be handled on a case-by-case basis, as with Lewis and Niwa, and seen as a resignation process.

3M, which has 200 employees, mainly in Auckland, can offer senior staff the chance to ease out through consulting contracts ranging from three months to a year in length, says HR manager Debra Ching.

Other companies place the emphasis on what happens afterwards.

SC Johnson, which has about 60 staff, continues to pay the health insurance of the ex-staffer and partner until they die, says administrator Melva Stewart.

But running ahead of the pack in formalising a phased-retirement policy is Auckland University of Technology, brazen about wanting to be the best tertiary employer in town.

Although it already offers various informal benefits to the departing silver set, its newly-packaged flexible retirement policy will be trumpeted publicly in March, says corporate services director Phil Ker.

The policy's thrust is captured in the label "career transition" rather than retirement, with its here-one-day-gone-the-next connotations.

The philosophy, says Ker, is "to help people have a safety zone in which they can start to make the transition".

AUT staff will be offered a regular on-campus programme of seminars on retirement planning and money matters, and AUT's six career counsellors are available free to workers.

Staff are able to move to retirement by reducing their hours to four or three days a week.

Ker admits there are a handful of senior jobs for which a proportional appointment would not work, though he can guarantee a proportional workload elsewhere.

What's new is a reflection of AUT's "four for five" policy, where people who work four years for 80 per cent of their salary get a year off, still at 80 per cent of their salary, with their job held open.

The scheme also offers two years work for six paid months off. People heading for retirement can opt for that, deciding at the end whether to return.

"It's for people to get a feel for what's it's like to have a lot more leisure and less income," explains Ker. "That's the thing that frightens people about retirement.

"We've just had a guy in the retirement bracket return from a four for five ... he said he discovered that he had no hobbies and that it was really scary.

"He's now back in his comfort zone and has a few more years to figure out what life after work will look like."

If staffers take full retirement and discover they're still not happy, "we're willing to re-employ them in a different area with less demand and stress, on a fixed-term [part-time] agreement - maybe [up to] two years".

That could be in their teaching area, or doing jobs such as exam supervision, for example, says Ker.

The policy also states that retirees will still be considered staff for the three years after they drop off the full-time payroll, a move which means they are eligible for free education at AUT.

But he sees the policy as incomplete as long as AUT can't offer subsidised superannuation, where employers match staff contributions to a retirement fund.

"We've got the will," he says, "we've got to find a way".

Overall, the policy seems remarkably generous. But in offering to re-employ staff, doesn't AUT risk being the remedy to poor staff decision-making?

"I'd say that the retirement decision ... is one of the biggest career decisions that people can make, and it's easy for people to get it wrong," says Ker.

"I think that it's in our interests to have people make good retirement decisions, and not postpone them because of uncertainty."

It's not about setting a social agenda, either: "I think it's just basic humanity. We really do value our staff and I think that's part of being as supportive as we can."

The policy doesn't override the need for staff to continue to perform, either. "We do have to deal with older staff going off the boil," says Ker. "We will manage poor performance as part of the aging process."

Last week's story on how to start considering your retirement

EEO Trust