December 1998 - Redefining retirement

There is something far too cosy about a report published this week called Redefining Retirement. It paints a picture of people dancing out of the door in their mid-50s to embark on a new life of unmitigated fun, glad to turn their backs on their jobs and move over for someone younger.

"Retirement is linked with fun now, not with being over the hill," said one retiree questioned in a series of interviews with people over 40. The report, by Sanders & Sidney, the outplacement company, is also based on research among 81 human resource directors.

Some two-thirds of the companies surveyed had early retirement policies and nearly half said the number of employees opting for early retirement was on the increase. Retirement, says the report, has undergone "a major image shift" and "employers welcome the change. They anticipate that people will continue to retire early, improving promotional opportunities for younger people and refreshing the workforce". It all sounds so painless.

The report brings to mind the film, Soylent Green , where people file obediently into "dying rooms" and fade away gently to their favourite music, to be disposed of and reconstituted as snack food for the masses. Edward G. Robinson, in his last film role, looks so serene as he lies back to the strains of Beethoven's Pastoral Symphony and gazes at giant TV images of pastures and hay meadows.

Perhaps this is what happens when people are programmed to accept an early departure as inevitable and "for the best". It would not do if too many people were, as Dylan Thomas put it, to "rage against the dying of the light".

In fact, if there is rage, it is likely to be against a lack of pension provision. According to the report, the hard fact of early retirement is that people often leave with far less pension than they might have enjoyed had they worked to so-called "normal" retirement age - as much as 30 per cent less if people go five years early. "As a result," says Tim Sharples, an actuary at Callund Consulting, a pensions consultancy, "employees may find they have to go on working beyond retirement age in order to maintain their income".

In this respect, the report appears to be on to something: the old demarcation between employment and retirement is disappearing, just as it is at the beginning of people's careers when it is no longer unusual to go back into education after a few years in work. Increasingly, says Sanders & Sidney, people are leaving conventional employment from age 40 onwards, not to stop working, but to do something different.

The report's guidelines for employers would make amusing reading were they not written in earnest. Raise the subject of retirement early enough, it says to employers, so that employees can give proper thought to their options. How early? As soon as they walk through the door? Well, yes, according to Robin Harding, a former planning officer who at 52 is now running a fitness centre with his wife, Kathleen, 46, a former tax inspector. "Companies should help staff plan for retirement from day one of their careers," he says. The Hardings are among several people interviewed for the report who have never looked back since taking early retirement.

Undoubtedly there are people making the transition from conventional employment to self-employment with some success, but many others would still have much to give their existing employers if it was not for the corporate obsession with youth. The report warns people to plan for retirement. People did that, by joining company pension schemes, only to find the rug pulled from under their feet when they were "persuaded" to go early. It was employers that wanted to change the deal.

The guidelines advise employers to plan for movement within the company so that employees can "move down the intensity scale if appropriate". They also suggest that companies should "allow older employees to wind down slowly - through reduced-time working, homework or project-based work". This feeds the suspicion that continues to prevail about homeworking - that it is somehow not proper work. There are plenty people out there who would argue differently.

Anyone reading this stuff might wonder whether they should give up before they start. If the attitudes expressed in this report are accurate, people are going to feel their careers are on the shelf once they are past 40. This discouragement of ambition among people with so much experience seems to run through every strata of a company, feeding the ambitions of a generation of early achievers while forcing the older dogs to learn new tricks. But the problem with early achievement is that it can lead to equally early demise.

Martin Taylor's resignation as chief executive of Barclays Bank at the grand old age of 46, is a classic example of someone who appears to have peaked too early. What now for the cerebral Mr Taylor? A government job or a spell in academia? Sanders & Sidney have plenty of advice: "Be positive - this is an enjoyable life stage," they say to those contemplating the limbo of early retirement. In practice, such blandishments offer little succour to those experiencing their first taste of rejection or failure.

It may be that an official retirement age was never a good idea. We have Otto von Bismark, the 19th century German chancellor, to thank for a universal retirement age of 65 for men. He thought that was a good age for men to end their productive lives, working on the sound assumption, at the time, that they were not going to live much beyond that. But Bismark lived in an age when labour was sought after, when experience counted for something.

How attitudes have changed. When human resource directors were asked to list the benefits and problems associated with early retirement, the biggest benefit they could think of was increasing the promotional opportunities for younger staff and the biggest problem was the cost of paying people off. Yes, there are worries about losing experience and so-called "corporate memory" but, overall, employer responses reflect the liturgy of youth. If Shakespeare were alive to day, re-writing the seven ages of man in As You Like It , the age of full-time employment would have the swiftest of entrances and an even faster exit. But how can you build a career from a walk-on part?

© 1998 Financial Times Ltd. All rights reserved

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