Voluntary retirement or compulsory retirement

Two employees retire in the same week, both after twenty-two years of service and on a salary of €2,900. One leaves of their own accord, the other is retired by the employer. Their payments differ by a factor of four, and their social treatment differs even more.

Two terminations, two initiatives

Voluntary retirement is decided by the employee: they leave the business to have their pension rights settled, observing a notice period. Retirement by the employer is decided by the employer, under strict conditions of age and following a procedure of its own.

That difference of initiative governs everything else. The amount of the payment, its social treatment, its tax treatment and any contribution owed by the employer all follow from the classification adopted, not from the employee's personal position.

The classification cannot therefore be freely chosen at signature. An employer who pushes an employee out by having them sign a voluntary retirement to avoid the compulsory regime risks reclassification, with all the financial consequences that follow.

Conversely, an employee who wishes to leave needs no agreement from their employer. They give notice of their decision, work their notice period, and the termination takes effect with no interview or authorisation being required at all.

The applicable notice is that of dismissal, unless a collective agreement is more favourable. An employee who fails to work it without being released may owe their employer a payment in lieu, a rare but legally established position.

The business therefore has an interest in having the employee's request in writing. A dated letter stating the intention to have pension rights settled closes off any argument at all about the true nature of the termination, even years after the departure has taken place.

What age allows

Retirement by the employer is not possible at any age. Below a threshold the employer may only propose, and a refusal by the employee closes the route for that year. Above a second threshold the decision becomes possible without agreement.

That gradation protects the employee from being removed on grounds of age alone. It imposes a timetable on the employer: the proposal is made within a set period before the birthday, and silence beyond it counts as waiver for that period.

Retirement pronounced outside those conditions is not merely an irregular termination: it is reclassified as dismissal without real and serious cause, with the compensation that attaches to it. The financial gap is considerable.

Checking the age and the procedure before starting anything is therefore the first reflex. It is a file check, done by looking at the date of birth and the applicable timetable, and it costs a few minutes.

• Voluntary: employee's initiative, notice period, no authorisation required
• By the employer: employer's initiative, conditions of age and a procedure
• Proposal refused: the route closes for the period concerned
• Irregular retirement: reclassified as dismissal without real cause

An ordinary end of contract, for everything else

Whatever the classification, the termination carries the ordinary end-of-contract duties: certificate of employment, final settlement, attestation for unemployment insurance, and a summary statement of employee savings where a scheme exists.

The unemployment attestation sometimes surprises people in this context, since the employee is retiring. It remains due: the employer does not presume the person's entitlements, and some paths combine partial retirement with continued work.

The final settlement holds the same lines as for any other termination, plus the retirement payment. Holiday accrued during the notice period is added to it, exactly as in any other end of contract.

The only real difference is the calendar. Retirement is prepared months ahead, which leaves time to draw everything up calmly, unlike an unforeseen termination where the documents are produced under pressure.

That lead time is rarely used. Many businesses still handle these departures exactly like any other, on the very last day, when the date had been known for a year and nothing whatsoever prevented the file from being prepared long in advance.