The Government has announced its timetable for the phasing out of the default retirement age of 65. From April 2011 employers will no longer be able to use the default retirement age to enforce compulsory retirement at the age of 65 above. The Government has put forward a range of reasons for this including demographic changes, the health and social benefits gained from working longer and the financial benefits to both individuals and the economy. This must also, of course, be viewed in the context of the Governments’ plans to increase the state pension age to 66.
The proposed changes are:
- No new notices of intended retirement may be issued after 6 April 2011
- Retirement under the default retirement age will cease completely on 1 October 2011
- Transitional arrangements will apply to retirements noticed before 6 April 2011 to take effect before 1 October 2011
- Retirement dismissals will still be possible after 1 October 2011, but only if they can be objectively justified
The consultation document can be found at http://bis.gov.uk/retirement-age
Employers will need to consider whether they wish to continue to have a retirement age and, if so, whether this can be objectively justified. Consideration will also need to be given to amending retirement policies and staff handbooks, changes to pension and healthcare arrangements, communicating changes to employees and ensuring adequate performance procedures are in place for all employees.
For more details or to discuss this or any other employment law issue contact Integra at contact@integralegal.co.uk