Twelve Steps to Negotiating a Bridge to Retirement
ACTUAL CASE HISTORY: Alex had been employed in the Information Technology ("I.T.") department of a large insurance company for 20 years. At 54 years of age, he was looking forward to retirement in just a few years. His wife, Barbara, had recently retired as a school teacher in a private school, and the two looked forward to traveling and spending more time with their grandchildren. Alex was just 11 months away from being able to retire with full pension and, more important to Alex and Barbara, his employer's Retiree Medical Plan, which provided for lifetime medical coverage at minimal expense. Barbara had no such plan at her school, and Alex had serious kidney problems that suggested he would face large medical bills in the future.
Unfortunately, Alex was chosen to be among about two hundred employees being let go as part of the company's outsourcing of its I.T. functions to a company in Pakistan. Alex knew that his being selected for downsizing was nothing personal against him, as the entire department was being disbanded as part of a company-wide move to lower payroll costs. It just seemed to come at the worst possible time. Alex immediately asked his Human Resources representative if there was any way that he might get the retiree medical benefits. Her answer was as swift as it seemed certain: "No, I'm sorry, there's absolutely nothing at all that can be done." He and Barbara consulted our firm from their home state of Iowa to see if we might be able to help.
What Alex needed and surely deserved is most often called a "bridge to retirement," that is, some mechanism - any mechanism - to get him from "non-qualified" to "qualified" status for full retiree treatment. We see this problem with considerable frequency.
After reviewing with Alex and Barbara all of the relevant facts, events and circumstances, we sent them on a search for more information. What they learned held the key to negotiating to get Alex the full retiree benefits he and Barbara sought. First, they learned that two senior executives (one an executive vice president, one a senior vice president) had received their own "bridges to retirement" during the last year. Second, they learned that a few of Alex's colleagues were being kept on board by the company, but re-assigned to different departments. Most importantly, Alex learned it was growing more likely that the company in Pakistan that was to take over his employer's I.T. functions might not be ready to do so for another six months.
We assisted Alex in preparing an email letter to his employer's Chief Operating Officer, outlining Alex's arguments that he should receive the benefits of full retirement status. His letter focused on three topics: (a) the company needed at least some I.T. professionals to stay on longer than originally estimated; (b) the company needed at least some I.T. professionals to continue working, but assigned to different departments, and (c) the company obviously recognized the concept and the fairness of providing a "bridge to retirement" to those who had given long-term and faithful service, as demonstrated in how they treated the "higher up's."
Though it took a few weeks to get the response, Alex did receive notification that his departure date would be later than originally thought, in fact 12 months later, giving him precisely what he needed. He and Barbara were surprised how relatively easy it seemed to achieve their "bridge to retirement" goals, after what had just weeks earlier seemed like a hopeless, lost cause. We weren't surprised, because we have many times helped clients negotiate their own "bridges to retirement." Our experiences in negotiating "bridges to retirement" have led us to conclude that the most difficult aspect of doing so is simply counteracting Human Resources' insistence that it's not possible, and convincing our client that it is. While achieving bridging to retirement is not always easy, with so much at stake, it's shameful not to try.
LESSON TO LEARN: If, just before you are scheduled to achieve full vesting in a company pension, or