Mandatory Retirement—a Growing Problem

Source: Inside Public Accounting

The purpose of mandatory retirement is to make room for new talent and reduce turnover. Mandatory retirement facilitates transfer of clients to younger partners.

Some firms allow retiring partners to work reduced hours with commensurate compensation reductions. This provides more time for successors to learn from retiring partners.

Mandatory retirement is a bigger problem today than in the past. As firms become more niche-oriented, their partners become more specialized, and replacing them is more difficult, especially in small firms.

Smaller firms might consider extending the retirement age from 65 to 67 and allow partners to work part-time for two years after retirement.

Partners should be penalized for not developing successors.

From Inside Public Accounting, June 2007, p. 4. The Platt Consulting Group (www.plattgroupllc.com). Subscription $369 per year; back issues—nonsubscribers $50. 317-733-1920.