Retired Characters
There are several reasons why a character might be retired before they die. If a character is damaged beyond what a players wants to roleplay, or if the player is looking for a new idea to play the rules of Campaign Continuance govern how that process works. In general a player is allowed to retire a character and take half the experience points to create a new character. But what happens to the old character?
When a player retires a character that character falls to the GM to control. Most times that means the character slips into the background of the world to rarely be heard from again. Sometimes a character is retired in the prime of their adventuring life, or is retired in an area where they will interact with the current player characters on a more frequent basis. In these cases the GM still maintains control of the character. However there will be some consultation with the player on what or how they think the character should react in a situation. Most often this occurs 'off stage' in roleplay threads or continued story lines.
As always the GM has the final say on what happens but this keeps well known characters around the periphery of the story arcs.