Can I be excluded from a voluntary early retirement plan?

[firewhen]

When a company offers this to employees who have met a minimum age/years of service requirement, but has a section about excluding employees who are crucial to the company, can they really be excluded from the plan? Watching everyone else leave with a juicy package, but having to remain because I am too valuable, seems crazily unfair. I know I am probably needlessly worrying, but I am wondering if after putting in my papers, they would or possibly could say sorry, we got you excited for nothing, we are denying you the package since we told you it is not a right. Does anyone have experience with this?

 

[freedomatlast]

When a company offers this to employees who have met a minimum age/years of service requirement, but has a section about excluding employees who are crucial to the company, can they really be excluded from the plan? Watching everyone else leave with a juicy package, but having to remain because I am too valuable, seems crazily unfair. I know I am probably needlessly worrying, but I am wondering if after putting in my papers, they would or possibly could say sorry, we got you excited for nothing, we are denying you the package since we told you it is not a right. Does anyone have experience with this?

Yes, they can absolutely exclude anyone they want. I was excluded from my companies' first round even though I voiced my desire to be included. I got the same "you are too valuable rhetoric". Before the second round, I got with upper management and mapped out a detailed plan they felt comfortable with, so they then included me in the second round.

 

[Perryinva]

Oh yes, happens all the time, though my company just delayed the date for critical employees this last time. As an aside, the criteria was laughable. Still enjoying getting paid for another 5 months as part of my ERP.

The worst “unfairness” was the random revert date they used. In 2010, they had a package offer in March, and generously included anyone that retired (and was eligible by the ERP criteria) 6 months previous . So you had tese retirees getting phone calls telling them to attend a meeting to explain their windfall, as they would have to take the severance as a lump sum like a lottery win. I don’t have to tell you how a $200k taxable windfall can screw up your taxes. But most sucked it up and were crazy happy about it.

Last year, they only made the ERP retroactive 2 months, to Jan1. Lots of sour grapes for those that retired in December, a normal retirement choice. They could have prorated the amounts, to be fair.

 

[Jerry1]

I can tell you from experience on the other side that it’s no picnic either. Back around 2000, my company offered a package to anyone who wanted to retire - anyone. We lost so much talent it was very disruptive. Typical of those types of actions, it had a very tight time frame. People were basically let go with a package. So, there was little to no transition of work.

If I was retirement eligible or just wanted a package, I’d be discussing it with people in management that I trust. It’s a very subtle “threat”, but basically let them know how much better it would be to be given a package and agree to a transition plan than it would be for you to just up and leave giving whatever required minimum notice there may be.

 

[mystang52]

OP: If they do exclude you, initially, maybe you can get some sort of compromise package. For example, agree to work reduced work week for a year or 2 in exchange for some sort of proportional retirement package?

 

[Aerides]

Watching everyone else leave with a juicy package, but having to remain because I am too valuable, seems crazily unfair.

They can do this of course. When I ER'd, it was into a package, but there was about 6 months leading up to it where MC was figuring out the details and creating chaos.

Basically was told my location had to change. Others were told skills, or other reasons. But no one got a firm "and if not, then package and this date" for months... but we all knew what it meant.

When it got down to the wire, one of my colleagues who was in the skills boat was told it no longer applied to him, and they withdrew him from the list. I was in the location boat, and wasn't planning to move, so I stayed on, got my package, yay me.

 

[Perryinva]

Usually the voluntary packages are set in stone, there are no compromises or individual dealings. When our company did it, we had about 4 weeks to decide to take it, but could opt out last minute for almost 2 months.

Management was given strict instructions that no deals to stay could be made. So those that stayed, took their chances. Many stayed, hoping the voids in higher positions would be filled by them, a good assumption considering 1700 people (out of over 20k) left, and in some departments 20-30%!

And for many of my friends, it did indeed work out that way. 10% raise with promotion, and higher bonus, if you still planned on 10 more years of w*rk, meant way more to them than taking the package and w*rking someplace else because they were not FIRE. Most of them did not have a pension (hired after they stopped offering them in 2008).

Some even with greater than 30 years and a pension, still stayed for reasons that were important to them (adult children with unusual disease/brain damage etc where the company HI would cover them vs having to take Medicare was a sadly too common one), some w*rk was their life, others in the middle of a divorce, but most commonly, the hope that a path to higher paying management would be possible without as much competition and so many slots opened.

Of course, the company counted on this, as they usually offered a package every 10 years or so, with each subsequent package less alluring. (I remember the first package had a month’s pay compensation plus a months pay for every year of service up to 24. Then it went down to 1+18. Then it was just 14 months pay max.).

They could easy trim aged fat without appearing discriminatory and honestly, most of the fat was older, tired, waiting for a package seniors. Younger go getters fill the positions for less than than the pensioners were getting paid, and that happened in a domino effect, where new hires could be brought in for less cost to the company than the positions vacated. Though this backfired for some in demand positions like engineering, where the shortage forced higher salaries since no pension could be offered.

Personally I had no problem knowing I was paid less than market because I was making more than I ever had planned, and a $55k pension (partially COLA) and low cost HI from 61-65 was worth a ton to me to be able to comfortably FIRE. The added cash bonus of the package easily compensated for almost 2 years of salary and increase to pension, which was my planned exit time.

 

[njhowie]

You could strategically become less productive and valuable.

 

[Splash]

I have seen certain positions or individuals denied a package. I have seen where only X% of the individuals in a given position were accepted. I have also seen where the company allowed a person to take a package but required them to stay for several months until skills and knowledge could be transferred.

 

[firewhen]

Thank you for all the responses everyone, you have answered my question. The package does say then can extend the separation date for key individuals or those in the midst of a project or if there are multiple tenured people in a department taking the package. I have already been told they would like me to stay and my boss keeps trying to encourage me to do so. I did let them know I legitimately want to help the company and do not want my departure to cause problems and would be happy to be one of those to stay longer and still keep the package. I mentioned I could even be a consultant for awhile. At any rate I am going to put in for the package and have my fingers crossed that they accept my request. I think they will and expressing my flexibility will hopefully mitigate any concerns they have.