Navigating Employee Retirement: How to Transition to Contractor and Manage Benefits?

Hi,

I work as a Sr. HR and Admin Exec in a software firm in Bangalore. I have detailed my issue below, please check if anyone can resolve it. We are around 100 employees in our company and one of them is nearing his retirement age, which is due in Aug '07. Since this is the first case in our company, I have no clue on the procedures involved when an employee retires.

Also, we want this employee to continue to work for us as an independent contractor even after his retirement. Please let me know how to go about it. Also, what will happen to the PF and other benefits like group mediclaim, group accident insurance that are provided to this employee after his retirement.

Regards, Ambika

Ms. Ambika,

In such kind of mails, please mention your email ID so that members can directly email you.

Now coming to your query.

1) The first thing is to write a letter to the employee at least 1-2 months in advance, informing them that they are retiring on that particular date.

2) Give them PF withdrawal forms (if they are covered under the PF Act) and submit the duly completed form to PF authorities on the last working day along with PF contributions (their and the employer's contributions).

3) Inform the concerned authorities to work on gratuity, so that you can hand over the gratuity cheque to the person on the last working day.

4) For this employee, you may arrange for counseling about post-retired life.

5) On the last working day, you can arrange a send-off function for this employee.

6) You can appoint them as a retainer, but please ensure that they should be appointed only after a gap of some days (ideally 1-2 months), so that they cannot claim uninterrupted service benefits or create any problems in the future regarding the age of retirement.

Hope this will help you.

Regards,

Abhijit

022-30466916

Dear Ambika,

The information provided by Mr. Abhijit is very good. You can also refer to Labour Laws. I have attached 2 files for Payment of Gratuity. For any help, please contact 080 4124 4385 Ext 221 (6 PM to 10 PM), Monday to Friday.

Regards,
M. Peer Mohamed Sardhar

Can we formulate the policy for re-employment of retired employees? If anyone has a policy for the same, please help me out to draft it. Looking forward to a reply.