Retirement at the employer's initiative: conditions and procedure 2026

Quick answer. The employer can automatically retire an employee from their 70th birthday, without their agreement or any procedure. Between 67 and 70, only with the employee's agreement, obtained through a written enquiry renewed each year. Before 67, retirement at the employer's initiative is impossible. The employee receives an indemnity at least equal to the legal severance pay, and an employer contribution of 40% applies since 1 January 2026.

Retirement at the employer's initiative is a termination of the contract by the employer, distinct from dismissal and voluntary departure. It follows strict age rules and a precise procedure depending on whether the employee is over or under 70. Confusing these regimes exposes the employer to a costly reclassification. Here is the framework applicable in 2026.

The employee's age entirely governs the possibility of retiring them.

From 70, the employer can carry out an automatic retirement, without obtaining the employee's agreement and without a prior procedure. Between 67 and 70, retirement is only possible with the employee's express agreement. Before 67, it is simply forbidden: the employer cannot impose the departure, whatever the employee's situation regarding their pension rights.

This gradation protects the employee against retirement imposed too early, and reserves automatic retirement for employees who have reached 70.

Between 67 and 70, the employer must follow a formalised annual procedure.

At least three months before each anniversary of the employee's 67th, 68th and 69th birthday, the employer can ask them in writing about their intention to retire voluntarily. The employee has one month to reply. If they refuse, or do not reply, the employer cannot retire them during the following year. The procedure must then be renewed the next year, until the employee turns 70, the age from which automatic retirement becomes possible again.

This mechanism gives the employee control of their departure until 70: without their agreement, the employer stays bound.

Retirement gives the right to an indemnity, calculated as for dismissal.

The employee receives a retirement indemnity at least equal to the legal severance pay, that is, under the ordinary regime, a quarter of a month's salary per year of seniority up to ten years, then a third of a month beyond. The collective agreement may provide a more favourable indemnity, which then applies. A notice period, equivalent to that of dismissal, is also due.

The calculation of seniority and reference salary follows the same rules as for dismissal, which brings the two arrangements closer on the indemnity side, as we mention regarding the other modes of termination, such as the mutual termination.

The social treatment of the indemnity has changed and increases the cost for the employer.

The fraction of the indemnity exempt from income tax is also exempt from social security contributions, within the limit of twice the annual social security ceiling, that is 96,120 euros in 2026. But for any retirement taking effect from 1 January 2026, a specific employer contribution at the rate of 40% applies to the fraction of the indemnity otherwise exempt from social contributions. This rising contribution increases the cost of retirement for the employer and must be factored into the operation's calculation.

Retirement at the employer's initiative is a legitimate but framed tool, to be handled with precision. The most serious mistake is to impose a departure before 70 without the employee's agreement, which exposes you to a reclassification as dismissal without real and serious cause, with the corresponding compensation.

Our advice is to map the employee's age and seniority, scrupulously respect the enquiry procedure between 67 and 70, and cost the full cost, indemnity and 40% contribution included, before deciding. When the employee is not yet 70 and refuses to leave, it is better to explore other negotiated separation routes than to force an irregular retirement. Legal security takes precedence over apparent savings.

An employer wanted to retire a 68-year-old employee, productive but near the end of their career, thinking they could do it automatically. The analysis recalled that between 67 and 70, the employee's agreement is essential, obtained by written enquiry. The employee having refused, any retirement was blocked for the year. Forcing the departure would have been reclassified as dismissal without real and serious cause. The employer gave up, then was able, as the 70th birthday approached, to carry out a regular automatic retirement, costing the indemnity and the 40% contribution.