Default retirement age to be scrapped

The default retirement age is to be scrapped on 1 October 2011, following a period of consultation and a six month transition period from April 2011.

Proposals announced on 29 July say that employers will not be able to issue notifications for compulsory retirement after 6 April 2011.  Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired.

After October 2011 compulsory retirement ages will have to be objectively justified because of the demands of the job. 

The change is intended to remove the administrative burden of statutory retirement procedures, for example employees’ right to request work beyond the retirement age and the need for employers to give six months’ notice of retirement.

The consultation asks what additional support is required for individuals and employers in managing without the DRA or statutory retirement procedure, including the provision of guidance or a more formal code of practice on retirement discussions.

Views are also being sought on whether removal of the DRA could have unintended consequences for insured benefits and employee share plans.

The employment relations Minister said “We want to give individuals greater choice and are moving swiftly to end discrimination of this kind”, and the move has been commended by at the Employers Forum on Age.  However, The CBI has warned that the proposals are too swift and will make workforce planning “next to impossible”. A spokesman said “A default retirement age helps staff think about when it is right to retire and also enables employers to plan more confidently for the future”.

Hardwick HR will be advising clients on the steps they should take to remain compliant with legislation and issue new policies as soon as more information becomes available.