Default retirement age scrapped

The government today confirmed that it will scrap the default retirement age.

The default retirement age will be phased out between April 6, 2011 and October 1, 2011.

Currently, the default retirement age enables employers to make staff retire at 65, regardless of their circumstances. But the government wants this to change as people are living longer (…and their pensions are costing more).

“Retirement should be a matter of choice rather than compulsion – people deserve the freedom to work for as long as they want and are able to do so,” says employment relations minister Edward Davey.

“Older workers can play an incredibly important role in the workplace and it’s high time we ended this outdated form of age discrimination.”

Scrapping the default retirement age won’t affect everyone: two-thirds of employers already operate without fixed retirement ages, and those with default retirement ages already offer flexibility for workers to work longer.

ACAS, the Advisory, Conciliation and Arbitration Service, will work with the government and employers to advise how to phase out the default retirement age over the next few months.

The government has also announced it will remove the administrative burden of statutory retirement procedures – with the DRA gone, there’s no reason to keep employees’ “right to request” working beyond retirement or for employers to give them a minimum of six months’ notice of retirement.

Therefore, from April 6, 2011, employers will no longer be able to issue any notifications of compulsory retirement using the default retirement age procedure. Between April 6 and October 1, only people who were notified before April 6, and whose retirement date is before October 1 can be compulsorily retired using the default retirement age.

Despite the government removing the default retirement age, it will still be possible for individual employers to operate a compulsory retirement age, however, provided they can objectively justify it – examples could include air traffic controllers and police officers.

Is this a good thing for business? Leave your comments below.

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