Executive Summary

Mandatory retirement, a policy requiring employees to retire at a predetermined age, has been a
subject of debate globally and in Canada. In global context, retirement policies have been implemented
with the intention of opening up job opportunities for younger generations. While proponents argue
that it facilitates workforce renewal and aids succession planning, however, these policies have received
criticism for perpetuating age discrimination and restricting the continued participation of experienced
employees in the workforce. Canada has transitioned away from mandatory retirement practices in
response to the need for promoting age equality and capitalizing on the expertise of older workers.
Eliminating mandatory retirement may impacts succession planning positively, fostering a work
environment conducive to knowledge transfer between generations. On the other hand, this shift may
limit career progression opportunities for younger employees, underscoring the importance of striking a
balance between intergenerational needs. A comprehensive approach is necessary, emphasizing
collaboration among different age groups and empowering individuals to make retirement decisions
based on their personal circumstances.
Introduction

Mandatory retirement refers to the practice of compelling employees to retire upon reaching a specified

age, irrespective of their ability or desire to continue working. In numerous countries across the globe,

these policies have been phased out or abolished due to growing concerns regarding age discrimination

and an increasing recognition of the benefits that experienced workers bring to organizations.

Retirement conditions and regulations vary significantly across different countries, influenced by factors

such as economic conditions, labor market dynamics, and societal attitudes towards aging.

Global Perspective on Mandatory Retirement Policies: A Review

Mandatory retirement, characterized by the compulsory exit of employees from the workforce upon

reaching a predetermined age, has been a subject of debate worldwide. Advocates of such policies

argue that they create job opportunities for younger generations, support workforce renewal, and foster

intergenerational fairness (Anderson & Brown, 2021). From a global perspective, mandatory retirement

policies vary widely. Some countries, such as Australia, the United States, and the United Kingdom, have

abolished mandatory retirement, citing age discrimination concerns (MacDonald, 2017). However, this

notion is deeply rooted in certain cultures, such as Japan's "mandatory retirement at age 60" system,

which is widely accepted as a means of accommodating younger employees (Kim, 2020). Similar

practices have been observed in other Asian countries like South Korea and China (Wang, 2018). In these

societies, age-based retirement practices are widely accepted and viewed as a means of accommodating

younger employees, promoting intergenerational equity, and providing opportunities for the younger

generation to climb the career ladder.

However, critics assert that mandatory retirement propagates age discrimination and impedes the

continued participation of experienced workers in the labor market (Anderson & Brown, 2021).

Furthermore, such policies may exacerbate demographic challenges associated with an aging
population, straining social welfare systems (Kim, 2020). In response to these concerns, various

countries have taken measures to abolish or incrementally raise the retirement age (Wang, 2018).

Canadian Context: The Evolving Landscape of Mandatory Retirement

Canada's historical embrace of mandatory retirement saw many employers compelling employees to

retire between the ages of 65 and 70 (Smith & Johnson, 2019). Over time, a notable shift in attitudes

towards these policies has emerged. In 2012, the Canadian government amended the Canadian Human

Rights Act to prohibit federally regulated employers from implementing mandatory retirement (Smith &

Johnson, 2019). In 2009, Section 15(1)(c) of the Ontario Human Rights Code eliminated mandatory

retirement in employment, allowing individuals aged 65 and older to continue working without facing

age discrimination (Government of Ontario, 2009). However, exceptions exist for occupations with bona

fide reasons for mandatory retirement (e.g., firefighters or police officers). This legislative reform was

driven by the need to promote age equality, safeguard older workers from age-based discrimination,

and empower individuals to determine their retirement timing based on personal circumstances

(Moore, 2022).

As attitudes continue to evolve, the importance of fostering inclusive and equitable employment

practices remains paramount in addressing the needs of Canada's aging workforce (Smith & Johnson,

2019; Moore, 2022). These factors have led to a gradual shift in policies and practices across Canada,

with many provinces and territories abolishing mandatory retirement (Moore, 2022). This change allows

older workers to continue contributing to their organizations and the economy while also promoting

more equitable and inclusive employment practices. Additionally, it provides individuals with greater

choice and control over their retirement decisions, allowing them to continue working as long as they

are willing and able to do so.

Factors contributing towards the implementing/eliminating early retirement in different countries

Financial Sustainability: Financial factors, including the attainment of personal financial goals and the

availability of full pensions, play a substantial role in early retirement decisions across various nations.

Studies in the Netherlands by De Wind et al. (2013) and Visser et al. (2016) found good personal and

family financial health to be a major factor for early retirement. In the Netherlands, higher-educated

workers with access to full workplace pensions were more likely to retire early, while their lower-

educated counterparts, who lacked pensions and financial certainty, faced obstacles in retiring early.

Furthermore, Engels et al. (2017) observed that adequate financial states played a role in early

retirement decisions in Germany. A similar trend was observed in Germany, where less-educated

workers without private pensions needed to continue working, whereas better-educated workers with

supplemental pension income could retire early (Hofäcker & Naumann, 2015).

Age discrimination: Ageism has emerged as another factor contributing to early retirement decisions

across different countries. Giasson et al. (2017) identified unfair treatment of older American workers

and self-internalized negative perceptions of aging as factors leading to early retirement. Similarly,

studies in Sweden and Denmark by Nilsson et al. (2016) and Thorsen et al. (2016) showed that age

discrimination in the workplace was a driving factor for early retirement. In these contexts, older

workers may feel pressured to leave their jobs due to the belief that they are less capable or productive

than younger workers. As awareness of age discrimination has grown, some countries have taken steps

to combat this issue. For example, the United States and Canada have abolished mandatory retirement,

allowing workers to continue in their jobs as long as they are capable and willing (U.S. Equal

Employment Opportunity Commission, n.d.; Labour Program, 2019). This policy shift recognizes the

value of older workers and promotes more inclusive work environments.

Aging Populations: As a country's population ages, its demographic composition shifts, with a higher

proportion of older individuals and a smaller share of working-age people. This demographic transition

presents challenges for the labor market, pension systems, and economic growth. Countries with rapidly

aging populations, like Japan, often consider implementing mandatory retirement policies to address

these challenges and policies to address the labor market's demographic imbalance (Kim, 2020).

Having examined the various factors contributing to the implementation or elimination of early

retirement across different countries, it is clear that the issue is multifaceted and complex. Demographic

shifts, economic considerations, evolving perceptions of retirement, and policy changes all play a role in

shaping retirement practices. From my personal perspective, addressing age discrimination and

implementing anti-discrimination policies plays crucial roles in promoting later retirement.

The Influence of Mandatory Retirement on Organizational Succession Management: Challenges and

Solutions

Organizational succession planning is crucial for ensuring the continued success and longevity of an

organization. It involves identifying and developing future leaders within an organization to fill key roles

as current employees retire or transition to other positions. However, the implementation of mandatory

retirement policies can pose significant challenges to established succession management practices.

One major challenge that mandatory retirement presents is the disruption of established succession

plans. Organizations invest considerable time and resources in identifying high-potential individuals and

providing them with the necessary training and development opportunities to assume leadership

positions (Rothwell, 2010). Forced retirement of experienced employees due to age restrictions can

derail these plans, leading to potential leadership gaps that are difficult to fill promptly.
Another impact of mandatory retirement on succession management is the hindrance of future leaders'

development within an organization. Experienced employees possess invaluable knowledge and

expertise that is not easily replaceable. When these individuals are forced to retire, their departure

results in a loss of skills and mentorship opportunities for younger employees who could benefit from

their guidance.

The loss of institutional knowledge and industry-specific insights is another consequence of mandatory

retirement. As seasoned employees retire, they take with them years of accumulated knowledge that

may not be adequately documented or transferred before their departure. This can lead to operational

inefficiencies and less informed decision-making processes.

To mitigate the effects of mandatory retirement on organizational succession management practices,

organizations should consider implementing alternative approaches. One such approach is phased

retirements, which allow experienced workers to gradually reduce their hours instead of retiring

abruptly, while still contributing their expertise part-time. Another option is offering flexible work

arrangements, which provide older workers with greater control over their schedules, enabling them to

continue working while also enjoying a more balanced lifestyle (Matz-Costa, C., & Pitt-Catsouphes, M.

(2010).

Conclusion:

The debate surrounding mandatory retirement is complex, with strong arguments both in favor of and

against the practice. While mandatory retirement policies have been prevalent in various cultures and

countries, there has been a growing recognition of age equality and the value of experienced workers. In

the Canadian context, the elimination of mandatory retirement has led to a more diverse and inclusive

workforce, benefiting organizations through knowledge transfer and talent retention. However, it also

presents challenges in terms of generational diversity and advancement opportunities.

Ultimately, a balanced approach is essential, one that considers the needs of both individuals and

organizations. Organizations should invest in robust succession management practices, promoting

intergenerational collaboration and leadership development. Additionally, governments and employers

should create supportive policies and workplace cultures that empower older workers to continue

contributing to the workforce if they choose to do so. Through these measures, the workforce can

become more dynamic, adaptable, and better prepared to tackle the challenges of the future.

References

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Canadian Human Rights Commission. (n.d.). Age discrimination. https://www.chrc-ccdp.gc.ca/en/age-

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Giasson et al. (2017): This study examines age group differences in perceived age discrimination and its
associations with self-perceptions of aging. The authors highlight the impact of age
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