Compulsory retirement may be scrapped

Under the current Default Retirement Age (DRA), employers can make staff retire at 65 regardless of their circumstances. The government is proposing the scrapping of the DRA, to allow people's working lives to be extended in line with increased average life expectancy.

The government is proposing to phase out the existing regulations over six months, leading to a total dissolution of the DRA by October 2011.

The government says the proposal would would help employers by taking away the administrative burden of statutory retirement procedures.

It says 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.

Employment Relations Minister Edward Davey said: “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. "We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.

“Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long term prosperity.

“We are committed to ensuring employers are given help and support in adapting to the change in regulations, and this consultation asks what kinds of support are required.”

Pensions Minister Steve Webb said: “Many older people want to work after age 65 and have a wealth of skills and experience that are not being used. We want to get rid of the Default Retirement Age so that if they want to work they can do so. By spending longer in the workforce they can also have a better pension in retirement.”

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 is open from today until 21 October 2010.