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Retirement Policy

Category Human Resources
Type Policy
Approved by Vice Chancellor, August 2005
Date Policy Took Effect 1 August 2005
Last Approved Revision
Sponsor Director of Human Resources
Responsible Officer HR Manager, Promotions & Remuneration
Review Date 31 October 2013

Purpose

Early planning for retirement is mutually beneficial in that it gives both staff and the University a more secure future, and enables both parties to plan with confidence.

The University will support staff to prepare for, and enter into, their retirement, and expects that staff will be proactive in planning for, and advising the University of, their retirement.

Organisational Scope

This policy and procedure applies to all staff of the University.

Policy Content

1. Retirement Planning

There are two aspects to retirement planning:

(a) Departmental Planning

It is important that the disruption caused by the loss of expertise through retirement be minimised as much possible through early advice and planning. Staff should be encouraged to discuss their retirement plans with their Head of Department at an early stage.

It is recommended that Heads of Department discuss with each staff member, who they think may be approaching retirement, their plans regarding retirement and ensure they are aware of what the University provides in terms of support and information.

Some questions that can be asked in relation to succession planning within a Department:
  • Is there a number of key staff in an age group where retirement within 3-5 years is likely?
  • Is there a concentration in one particular age group, or an imbalance in the age profile?
  • Are there any specific issues related to succession planning in a particular discipline or group?
  • Are there staff with the appropriate capabilities and attributes available to fill key positions?
  • What strategies are being developed or implemented to develop high potential staff to fill key roles in the future?
  • What are the characteristics of the future pool of academic staff (or other occupational groups) in particular disciplines - is it growing, shrinking, ageing or becoming younger?
  • Are there strategies to attract and retain future staffing in “at risk” areas?
Some strategies that can be adopted are:
  • Professional development and mentoring programmes.
  • Understudying.
  • Performance management for individual staff.
  • Flexible employment arrangements.
  • Phased retirement/retirement transition programmes to allow employees to remain in the workforce on reduced schedules, moving gradually to part time or into a mentoring/consulting role, or having periods of leave to explore post-work paths.
  • Job Redesign – Job descriptions may need to be altered to cater for the needs of older workers.

(b) Individual's Planning

Staff are encouraged to actively plan and prepare for their retirement and the University supports this in the following ways:

(i) Superannuation

The University has a subsidised superannuation scheme (New Zealand Universities Superannuation Scheme), that also has a KiwiSaver Compliant version that allows members to gain many of the KiwiSaver advantages the Government offers. The University contributes at the rate of 1.35% for every 1% contributed by the staff member up to a maximum of 6.75%. Staff are encouraged to access this benefit and can view more details on the superannuation pages.

For more details contact Brian Donnelly: brian.donnelly@otago.ac.nz or superannuation@otago.ac.nz

(ii) Financial Planning

Regular financial planning seminars will be provided.

(iii) Career / Lifestyle Planning

Regular seminars will be provided and an information pack made available.

2. Enhanced Retirement

Where it is acknowledged that it is mutually beneficial for a staff member to retire, for example where a surplus staffing situation has been declared, a retirement gratuity (in addition to the staff member's contractual entitlement) may be paid.

The amount of the retirement gratuity will be a matter of negotiation, taking into account the length of service, the University's ability to pay and the particular circumstances.

3. Phased Retirement

Phased retirement is where a staff member's hours of work are progressively reduced by an amount, and over a period, mutually agreed, culminating in full retirement at a specified date.

(a) Employment Conditions

Phased retirement will be formalised by way of a variation to the employment agreement. The variation must specify: the amount of reduction in effort; the amount of salary payable, based on the reduced work effort; the effective dates for each reduction; and the retirement date. For example:

Effective Date Percentage Salary
Today1 March 20091 March 20101 March 2011

100%

$60,000

75%

$45,000

50%

$30,000

Retirement

If circumstances change the variation may be varied by mutual agreement.


(b) Superannuation

Important note for Government Superannuation Members:

Where an employee is a member of the Government Superannuation Scheme, the amount of superannuation payment on retirement is based on the payments made over the past five years. Therefore, the superannuation payment will therefore be reduced if the salary decreases through phasing of retirement.

The effects of this are able to be fully mitigated by careful planning. It is important that members of Government Superannuation discuss their options with Brian Donnelly, email brian.donnelly@otago.ac.nz or phone 479 8274 at an early stage.

(c) Retirement Gratuity

A staff member who is eligible for a retirement gratuity will be paid the gratuity at the proportion he/she was employed for immediately prior to commencing the phased retirement. The phased retirement period will count towards the calculation of the payment.

(d) Tenure

A tenured staff member who participates in phased retirement shall continue to be deemed to be a tenured member of staff until the final day of employment.

(f) Promotion

An academic participant will remain eligible for consideration for promotion. A general staff participant will remain eligible for salary review.
Such advancements will be assessed on the same basis as for full-time staff.

(g) Calculation of the Part-time Amount

For the purpose of a phased retirement variation, the Head of Department will negotiate the amount and type of duties expected of the participant, consistent with the reduced hours of work and the requirements of the position.

(h) Space and Support Requirements

Required office and/or laboratory space, secretarial service, computer use, and other support services will be made available in the usual way. These services will be negotiated when developing the provisions of the variation.

The University's intent is to provide appropriate laboratory and office space, but exigencies of space and use of facilities may not always permit this.

4. Procedures

The Human Resources Division is available to provide advice at any stage in this process.

(a) Preliminary Process

Several months ahead of the formal request, the employee considering phased retirement should informally discuss with the department head, and other appropriate persons, the advantages and implications of a reduced appointment.

(b) Application Process

The employee wishing to participate in phased retirement will submit a request, in writing, to the Head of Department. The written request should include the desired percent of effort, the desired effective date and duration of the phased retirement, and an explanation as to why this desired reduced effort and phased retirement would not materially alter the expectations and responsibilities inherent in the position.

(c) Approval Process

(i) The Head of Department will consult with the applicant and other appropriate members of the department to evaluate requests in terms of planning, personnel needs, costs, space and support requirements for the applicant and potential replacement (s), and other pertinent factors.

(ii) The Head of Department will submit a report of the department's recommendation and a preliminary listing of the proposed contract terms to the Dean and/or Divisional Head. The applicant will receive a copy of this recommendation.

(iii) The Dean and/or Divisional Head will review the proposed terms and the departmental recommendation, and will make a determination based on the facts and merits of the recommendations.

(iv) The Dean or Divisional Head will write to the applicant conveying in broad terms the details of the decision.

(d) Development of the Variation

If the request is approved by the Divisional Head, all documentation will be sent to Human Resources to draw up a formal variation. No agreement will be final until both parties have signed this variation.

Contact for Further Information

If you have any queries regarding the content of this policy or need further clarification, contact the HR Manager, Promotions & Remuneration at dan.wilson@otago.ac.nz or (03) 479 8092.