What to do when retiring at 45?A 55-year-old banker with Korea Exchange Bank was essentially forced to retire earlier this year. Though the bank’s official retirement age is 58, the banker was not assigned to a post for next year.
“I can wait to be posted,” he says, “but I’d rather retire to avoid to being embarrassed. Most of the people around my age are in the same situation.”
Since the financial crisis that swept the country in 1997 and ‘98, conglomerates have made restructuring their workforces a regular cost-cutting feature. As a result, employees, particularly managers, in their 40s and 50s are increasingly being forced into retirement.
Many businesses seem to set arbitrary cut-off ages; once an employee reaches that age, it is likely that his days at the firm are numbered. At most large companies, rumors start flying every fall ― when new recruits are normally hired ― about what the cut-off age will be. At some firms it has dropped as low as 45. There is even a joke that if you keep your job past age 45 you must have no conscience or sense of shame.
Seoul Bank trimmed 540 workers when it merged with Hana Bank last November. Managers over the age of 52 were offered early retirement. Now just 117 of Hana Bank’s 7,100 employees are over 50.
“The workers who got fired include many who have special know-how in a certain area,” says a Mr. Lee, 54, a former executive from Seoul Bank who resigned last year. He asked that his full name not be used. “It would certainly do some harm to a corporation in the long run when it dismisses workers with valuable job experience just because they’ve reached a certain age.”
The average age for managers at Samsung Group affiliates to be promoted to the executive level is 45 years 9 months, compared to 47 years 3 months in 2001. The oldest of Samsung Life’s executives is 46 years old. “People who work until the company’s official retirement age of 55 are mostly on the production lines,” says one Samsung Group employee.
Military officers who fail to get promoted to the next rank within a certain period have long opted to retire earlier than the norm in civilian circles. “A military career is certainly not more attractive than a corporate career in that regard”, says a Colonel Lee, 51, who will retire from the military later this month. He asked that his full name not be used. “Because of my age, the main options open to me are either manual labor or starting my own business, which is impossible since I lack capital.” While he says he understands the military tradition of early retirement, Colonel Lee adds, “it seems to force people out who are too young to retire and also too old to start again.”
However, Colonel Lee says, thanks to his military pension, which entitles him to around 2.4 million won ($2,025) a month as soon as he leaves the military, he is probably better off than most civilians who are forced to retire early. Most corporate workers, even if they are pushed out of their jobs at 45, cannot start collecting a pension until after their 65th birthday.
At many foreign companies, age is not the determining factor in whether an employee is asked to stay or go. “We don’t dismiss someone because he is over a certain age,” says an executive in the human resources department at Motorola Korea. “Motorola launched its office here in 1967, and from the beginning an individual’s talents and achievements have determined whether they keep working here or not. Seniority is not a factor.”
P&G Korea does regularly ask older employees to leave. But the company has been praised by former employees for its efforts to provide early retirees with help in finding work. The company has a re-employment education center in Cheonan, South Chungcheong province, that helps those forced into early retirement develop a plan and learn the skills they need to transition to a new line of work.
Japan, whose corporate culture is similar to Korea’s, may offer some guidance. Canon Inc., a maker of printers, cameras and other imaging devices, has managed to turn a profit every year since Japan’s decade-long economic malaise began while still guaranteeing lifetime employment.
How? “Jobs are guaranteed,” says a Canon executive, “but promotions and pay raises are not. Every employee is given a sense of security and encouraged to do his best.”
by Special Reporting Team