The phrase signifies the calculation of severance pay upon retirement. This calculation determines the amount of compensation an employee receives when leaving a company upon reaching retirement age. Factors considered often include salary, length of service, and applicable collective bargaining agreements or legal regulations. For example, an employee with 20 years of service and a final salary of 50,000 euros might be entitled to a certain percentage of that salary for each year of service, based on established rules.
This financial provision is important for employees transitioning into retirement as it provides a financial buffer during this significant life change. It can assist in covering living expenses, funding retirement projects, or supplementing pension income. Historically, such payments reflect a recognition of an employee’s loyalty and contribution to the organization over their years of service. Moreover, it is a legal obligation for many employers, adding a layer of financial security for retiring workers.
