This section provides an update on the key requirements for employers relating to the retirement of staff, in particular the changes due to the removal of the Default Retirement Age
(DRA) which came into force on 6 April 2011. There has been a gradual phasing out of compulsory retirement and the last possible date for notifying an employee of compulsory retirement was on 5 April 2011 and for an employee duly notified of their retirement on that date their latest possible date of retirement was 1 October 2011. Compulsory retirement is now only permitted in exceptional circumstances where the employer can objectively justify it.
Information about supporting employees who are planning for retirement and good practices for employers upon the removal of the DRA is also provided here. There are a number of benefits for employers that accompany the change in retirement legislation, including the retention of expertise in the workplace.
- There is no longer a Default Retirement Age (DRA).
- An employer should not pressure an employee into resigning because they are approaching a certain age, including staff who are at or over the state pension age
- Workers can give reasonable notice to end their employment by retirement
- Enforced retirement is only possible where the employer can objectively justify this based on social policy objectives which go beyond the employer's own business needs into the public interest and where forced retirement of the employee at a particular age is proportionate to the achievement of those social policy objectives
- Workplace discussions and future planning should take place on a regular basis to ascertain the thoughts of staff about when they may wish to retire in order to enable the organisation to look at staffing issues and budgets
- Employers must avoid discrimination against any workers on the grounds of age
- Employers need to avoid making an assumption that an employee's performance may decline as a result of age.