Clifford Chance (CC) has voted to update its early retirement package for partners, with the magic circle firm bringing the system in line with age discrimination laws.
Under the previous system, partner made up before 2005 could opt to take early retirement between the ages of 50 and 55 and receive five years of pension payments equating to up to 25% of plateau profits. CC has now discarded the age reference and will instead base the system on years of service.
The change, which applies to partners made up before 2005 under the firm’s old policy, means partners who have been in the equity for 15 years will now be entitled to a pension of about 17% of plateau profits for the five years after retiring. For partners of 20 years or more, that figure will increase to a cap of 23% or a financial limit of £276,000.
The switch from age to years of service means more partners will qualify for the payments, meaning the revamped regime will cost CC more to operate. However, reducing the maximum available annuity to 23% from 25% will save CC an estimated £15m over the next 30 years.
Voting closed within the last week, with the new regime back-dated to come into effect on 1 January.
Executive partner Chris Perrin (pictured) told Legal Week: “We took the view that there were elements that were against age discrimination rules so should be changed even though we thought it unlikely that partners would challenge the arrangements.
“It means those partners who under the old arrangements were losing out (those in overseas jurisdictions retiring later) won’t lose out any more and you may see partners in
The decision followed a wholesale review of the firm’s early retirement package led by Perrin alongside managing partner David Childs, senior partner Stuart Popham and corporate tax partner David Harkness.
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