The Government has announced that the default retirement age (DRA) will be consigned to the history books in October 2011 under proposals published last week.
The new plans allow for a six month transition from the existing regulations, following the announcement in the budget that the DRA would be phased out from April 2011. Currently employers can make staff retire at 65.
This measure is one of the steps the Government says it is taking to help and encourage people to work for longer against the backdrop of demographic change.
Others include reviewing when the state pension age should increase to 66 and re-establishing the link between earnings and the basic state pension.
The consultation also proposes to “help” employers by removing the “administrative burden” of statutory retirement procedures. With the DRA removed, the Government claims there is no reason to keep employees' ‘right to request’ to work beyond retirement or for employers to give them a minimum of six months notice of retirement.
Although the Government is proposing to remove the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples could include air traffic controllers and police officers.
The consultation asks whether the Government could provide additional support for individuals and employers in managing without the DRA or statutory retirement procedure.
This includes the possibility of future guidance or a more formal code of practice on handling 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 consultation closes on 21 October 2010.
The document can be accessed at: http://www.bis.gov.uk/retirement-age