Mandatory Retirement PolicyQuestionnaire
Introduction: How to Use This Tool
Requiring employees to retire at 65—or any other predesignated age—is a form of illegal age discrimination banned by the human rights laws of every jurisdiction. However, there are a couple of significant exceptions to the rule. Employers can still enforce a mandatory retirement policy if they can justify it as either:
- A bona fide occupational requirement (BFOR); or
- Part of a bona fide pension or retirement plan (BFPP).
The burden of proof is squarely on the shoulders of the employer. And while meeting that burden is a formidable challenge, in certain circumstances, justifying mandatory retirement as a BFOR or BFPP is not only possible, but imperative to business. As HR manager, you can be expected to play a key role in determining whether your organization is in the position to adopt, implement and legally defend a mandatory retirement policy as a BFOR or BFPP. Here’s a Questionnaire to use in making that determination.
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QUESTIONNAIRE FOR ENFORCING A MANDATORY RETIREMENT POLICY
GENERAL RULE
A policy, practice or contract that makes it mandatory for employees to retire at a prescribed ageis deemed to be illegal age discrimination banned by the human rights laws.
EXCEPTIONS
A mandatory retirement policy may be enforceable if the employer can justify that it is either:
- A bona fide occupational requirement (BFOR); or
- Part of a bona fide pension or retirement plan (BFPP).
PURPOSE
The purpose of this Questionnaire is to set forth the questions that must be asked to determine whether the organization can rely on the BFOR or BFPP exception to justify implementation of a mandatory retirement policy for its own employees.
PART A: BONA FIDE OCCUPATIONAL REQUIREMENT JUSTIFICATION
Instructions: Ask the following questions to determine if the proposed mandatory retirement policy can be justified as a BFOR.
QUESTION 1: DOES MANDATORY RETIREMENT SERVE A JOB-RELATED PURPOSE?
[YES] [NO]
Instructions: For mandatory retirement to be a BFOR, it must be “rationally connected to the performance of the job.” Translation: The reason for forcing employees to retire at the designated age must be based on the duties of the position, e.g., the promotion of workplace health and safety. But be aware that simply asserting that employees are too old for the job is not enough. To prove “rationally connected”there must be objective evidence, such as expert testimony, medical statistics or other data, supporting the negative impact of age on the performance of the particular job. If there is, check “YES;” if there isn’t, check “NO.” If you check “NO”, mandatory retirement cannot be justified as a BFOR and proceed to Part B of the Questionnaire. If you check “YES,” go to the next question below.
QUESTION 2: WAS THE POLICY ADOPTED IN “GOOD FAITH”?
[YES] [NO]
Instructions: The second thing the organization has to show to prove that the mandatory retirement policy is a BFOR is that it adopted the policy with an “honest and good faith” belief that it would promotethe legitimate, work-related purpose referred to in Question 1. In other words, there must be no ulterior motives or hidden agendas for imposing the policy. Check “YES” if the policy meets the good faith/honest belief test; check “NO” if it doesn’t. If you check “NO”, the policycannot be justified as a BFOR and proceed to Part B of the Questionnaire. If you check “YES,” go to Question 3 below.
QUESTION 3: IS THE POLICY ‘REASONABLY NECESSARY’ TO ACCOMPLISH THE PURPOSE?
[YES] [NO]
Instructions: The third and toughest prong of the BFOR test to meet is showing that the mandatory retirement policy is “reasonably necessary” to accomplish the legitimate work-related purpose referred to in Questions 1 and 2. The question: Could the organization have accomplished the purpose without requiring employees to retire at the designated age?
Example: A fire department adopts a mandatory retirement policy for firefighters age 55 and older. The policy is rationally connected to the performance of the job since scientific evidence shows that letting a person over 55 fight fires is dangerous to not only the firefighter, but co-workers and the public. The department also has an honest and good faith belief that the policy is necessary to accomplish the purpose. However, the department won’t be able to prove the policy was reasonably necessary if there were less discriminatory alternatives available, e.g., simply reassigning firefighters to desk duty upon reaching age 55.
Check “YES” if the policy meets the “reasonably necessary” test; check “NO” if it doesn’t. If you check “NO”, the policycannot be justified as a BFOR and proceed to Part B of the Questionnaire. If you check “YES,” given the fact that you also answered “YES” to Questions 1 and 2 above, you should be able to justify the policy as a BFOR.
PART B: BONA FIDE PENSION PLAN JUSTIFICATION
Instructions: Ask the following questions to determine if the proposed mandatory retirement policy can be justified as part of a bona fide pension plan (BFPP):
QUESTION 1: IS THE MANDATORY RETIREMENT REQUIREMENT PART OF A PENSION PLAN?
[YES] [NO]
Instructions: The first thing you must prove to justify a mandatory retirement policy as a BFPP is that the policy is part of a pension or retirement plan. If that is the case, check “YES;” if it’s not, check “NO.” If you check “NO”, mandatory retirement cannot be justified as a BFPP and you can stop here; but if you check “YES,” you must proceed to the next question below.
QUESTION 2: IS THEPENSION PLAN ‘BONA FIDE’?
[YES] [NO]
Instructions: The final step in the BFPP analysis is determining if the retirement or pension plan referred to in Question 1 above is “bona fide.” To meet the “bona fide” standard, you must be able to answer “YES” tobothof the following questions:
A.Is the plan a legitimate and genuine pension or retirement plan? [YES] [NO]
B.Was the plan adopted in good faith to meet employees’ retirement needs—as opposed to being adopted for the purpose of defeating employees’ right to be free from age discrimination? [YES] [NO]
If the answer to questions A and B are both YES, check the “YES” box for Question 2; otherwise, check “NO.” If you check “NO”, mandatory retirement cannot be justified as a BFPP; but if you check “YES,” given the fact you also answered “YES” to Question 1 above, you should be able to justify the policy as a BFPP.