KPMG announced changes to its partnership agreement on Wednesday that will see its expected retirement age of 58 scrapped.
KPMG Australia chairman Alison Kitchen said she was pleased to see support for the board’s recommendations amid changing ideas and expectations.
“The board was explicit that we needed to change,” she said. “The shape of the partnership is changing, with many partners joining from outside the firm, or from within but later in their careers.
“Partner expectations are also evolving, with more partners wanting to work longer. Community and client expectations are shifting, too.”
Ms Kitchen said fairness was the core tenet of the board’s review of the firm’s retirement policy and that the change is within the best interests of all partners.
“In considering our approach to the review of voluntary retirement provisions, fairness was an underlying principle, together with competitiveness to recruit and retain the best talent, and alignment to community expectations,” she said.
“The changes are in the best interests of both existing and future partners, and strengthen our firm over the long term.”
The change follows a board-led review of voluntary retirement provisions in the firm’s partnership agreement, compounded with mounting criticism of employment frameworks adopted by the big four that force partners out of the door earlier than they might want to.
KPMG launched the review in August last year, but stood by it as recently as the month before, saying that partners are aware of the clause when they join and are treated “fairly” as they exit.
In a statement last August, the Australian Council of Human Rights Authorities called for KPMG to dump its retirement policy, describing it as being against the principles and purpose of age discrimination laws.
EY last July dropped a similar clause that required partners to retire at 60. At the time, then-chief executive of EY Oceania Tony Johnson said the changes were made in a bid to optimise the firm’s capabilities and to improve succession planning.
Meanwhile, Deloitte faced contention over its own retirement policy, which saw the firm exposed to more than $3 million in damages over claims the firm tried to force audit partner Colin Brown, 64, out of his partnership once he reached the firm’s retirement age of 62.
Mr Brown’s case sparked debate over whether the policy — and those like it at other large firms — infringe upon the Age Discrimination Act.
John Buckley is a journalist at Accountants Daily.
Before joining the team in 2021, John worked at The Sydney Morning Herald. His reporting has featured in a range of outlets including The Washington Post, The Age, and The Saturday Paper.