SmartMoney Blogs

A blog about living in and planning for retirement

Heck No, We Won’t Go! Is “Forced Retirement” OK?


An article in the Wall Street Journal this week tells the story of 68-year-old Norway resident Karin Johansen, an insurance adviser whose company tried to force her retire. “Depressed” by the idea, Johansen fought back, taking the case all the way to the Norwegian Supreme Court.  But the court sided with her employer, Norwegian insurance company Gjensidige, and Johansen was forced into a “mandatory retirement.”  It’s a situation, the Journal says, that’s happening across Europe.  But for those of us in the U.S., is there anything to worry about?

The answer: It depends.

For the most part, U.S. companies do not — and legally cannot — force you to retire based on your age. But there are a number of exceptions. State and local police and firefighters typically must retire between the ages of 55 and 65, air traffic controllers at 56 and commercial airline pilots at 65. These occupations have mandatory retirement ages, “primarily for ensuring their safe and effective conduct,” writes Jagadeesh Gokhale, a senior fellow at the Cato Institute, a nonprofit public policy research institute.

Many U.S. law firms also force partners out at a certain age. A report by the American Bar Association found that mandatory retirement policies for partners existed in 57% of law firms with 100 or more lawyers. The reason law firms (and companies) can do this is because of a loophole in the age discrimination laws that exempts some high-level, well-paid senior executives from the mandatory retirement protections. But this may soon change: The Equal Employment Opportunity Commission has sued at least two law firms in recent years accusing them of discriminating against older partners with policies like these, but these policies still haven’t been eradicated from all firms.

Most workers, however, won’t ever encounter a “mandatory retirement” policy since.  Still, that doesn’t mean companies aren’t sometimes trying to force out older workers — even though there isn’t an “on paper” policy.  Age discrimination claims have increased 61% over the past decade, according to the EEOC.  And with a tight job market and more workers postponing retirement, experts say, aging at in the workplace may only get harder.

Readers, what do you think?  Is “mandatory retirement” OK?


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 5)

View all Comments »
    • More Bush/Cheney DEREGULATION Section 412Lends $80 million to the Healy Plant in Alaska to cornvet an existing clean coal plant into a regulator coal plant.Section 413Senator Larry Craig, on behalf of Senator Ken Salazar, got Section 413 into the energy bill by unanimous consent on June 23. Corporate lobbyists representing Pacificorp and Xcel recommended the language to Sen. Salazar. While the intended recipient may be Pacificorp and/or Xcel (for unannounced projects), another company qualifying for the loan guarantee is the Medicine Bow Fuel & Power project in Wyoming (the section requires that the project be located in a western State at an altitude greater than 4,000 feet ) The section explicitly states that the demonstration project shall not be eligible for Federal loan guarantees making the relationship between this section and the very similar-sounding loan guarantee project outlined in Section 1703 a little unclear. Medicine Bow, Wyoming is at an altitude of over 6,500 feet. Medicine Bow is owned by DKRW, a Houston-based firm led by four former Enron executives, including Thomas White. White served as Secretary of the Army from May 2001 to March 2003. Prior to that, he served as vice chairman of one of Enron’s largest divisions, Enron Energy Services (EES).Under White’s tenure, EES played a major role in the California energy crisis. In 1998, the year he became its vice chairman, EES was America’s 61st largest energy trader. When he left, his division was the 28th largest energy-trading firm in the country. Until March 2001, the trading operations of EES were separate from the rest of Enron’s Wholesale Energy unit meaning White was responsible for a huge trading operation that played a significant role in California’s energy crisis.Also, under White’s direction, EES severed at least two large retail contracts in California in January and February 2001 during the height of the energy crisis, which Enron helped create. Based on the evidence on hand, it appears that EES took the power that had been obligated to serve these retail consumers and sold it in the wholesale market where EES could fetch higher prices than it could by continuing to sell power at lower, fixed rates to retail customers. This significant wholesale trading operation, combined with White’s decision to break retail contracts in California, made the division a major player in California’s deregulated wholesale market.Section 414The recipient of Section 414, has not yet been identified. The provision authorizes the federal government to provide loan guarantees for a project to produce energy from a plant using integrated gasification combined cycle technology of at least 400 megawatts in capacity that produces power at competitive rates in deregulated energy generation markets and that does not receive any subsidy (direct or indirect) from ratepayers. Section 415This section provides loan guarantees for at least 5 petroleum coke gasification projects which have not been identified.

    • 1

    • -1′

    • all the benefits go to the wealthy and the prosperous; what does our savior say about those who oppress the poor?

    • I was laid off because I was too old to perform the jobs which they wanted to give me. Unless you are black, or you hit the headlines they let you go when it suits them. A rose by any other name is still a rose.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.