Can You Force an Employee to Retire?

Aug 19, 2014

To put simply, the answer is no, you cannot force an employee to retire.

Ending the discussion there may set a brevity record but does not answer the next logical question – why is this human resource question being contemplated in an employee benefits blog? The reason is that most benefits plans have termination ages around the previous mandatory age of retirement of age 65. If an employee works past the plan termination age and the employee continues to meet plan eligibility requirements, it is very common for employers to apply for an extension of the termination age for almost all of the benefits. In fact, we have implemented extensions all the way up to age 85, with some coverage restrictions, but normally the extensions to age 75 are granted without many issues.

The only benefit that is very difficult to extend coverage beyond age 65 is long term disability. One reason for this is the insurers tend to still consider age 65 as the normal retirement age. The other and more important reason is the additional risk the insurers expect to take on. Morbidity risk increases exponentially after approximately age 50, meaning that the risk on a 65 year old employee is more than double that of a 50 year old employee. Risk at age 70, therefore, would be substantially higher than at age 65. Even if this were regularly offered, the additional costs would be prohibitive.

All an employer needs to do is contact your TRG Associate to ensure that employees who don’t retire at age 65 have coverage extended beyond that age.

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