The phrase signifies the calculation of severance pay upon retirement. This calculation determines the quantity of compensation an worker receives when leaving an organization upon reaching retirement age. Components thought-about usually embody wage, size of service, and relevant collective bargaining agreements or authorized rules. For instance, an worker with 20 years of service and a closing wage of fifty,000 euros may be entitled to a sure share of that wage for every year of service, based mostly on established guidelines.
This monetary provision is essential for workers transitioning into retirement because it gives a monetary buffer throughout this important life change. It will possibly help in overlaying dwelling bills, funding retirement initiatives, or supplementing pension earnings. Traditionally, such funds mirror a recognition of an worker’s loyalty and contribution to the group over their years of service. Furthermore, it’s a authorized obligation for a lot of employers, including a layer of economic safety for retiring staff.
