Raising state pension age won’t necessarily increase supply of or demand for older workers – abolition of mandatory retirement age is necessary

30 November 2005

Raising the state pension age is only a small part of the battle to balance the economic books, according to the Chartered Institute of Personnel and Development. With so many older workers not even working up to the existing state pension age, the greater challenge is improving the management of older workers to ensure they want to keep working, and to keep working productively. An abolition of the mandatory retirement age, as recommended by Lord Turner, would remove the ‘ejector seat’ option from employers, and encourage better management of older workers.

Duncan Brown, Assistant Director General of the Chartered Institute of Personnel and Development, responding to the publication of Lord Turner’s Pensions Commission Report, said:
“Raising the state pension age may well increase the notional supply of older workers, but it won’t necessarily increase the actual supply of them, or demand for them.

“One quarter of men and one third of women aged between 50 and the current state pension age are already not in the labour market. These people illustrate the real pensions and retirement challenge. If we want people to work longer, then we are going to have to find ways of ensuring that employment is attractive to older workers, and that they have the skills to make a contribution to the workforce.

“Too many employers are lazy in their attitudes to older workers, happy to place them in the ‘out tray’ for years before they actually retire. This plays a part in declining job satisfaction amongst older workers. Keeping people working longer is one thing, but keeping them working productively and making full use of their skills and experience is a greater management challenge.

“The chances of an increase in the state pension age achieving the desired objectives and boosting UK productivity rest on the willingness and ability of employers to adapt their employment practices to engage older workers more fully, to motivate them, and to reduce their desire to retire early. If the government were to abolish the mandatory retirement age altogether, as Lord Turner recommends, they would remove the ‘ejector seat’ option from employers and encourage a more careful focus on effective management.”


ends


Notes to editors
• The CIPD has the following spokespeople available for interview:

• Duncan Brown, CIPD Assistant Director General
A member of the DWP Employers’ Taskforce on Pensions, an expert on pensions, pay and reward, and head of the CIPD’s extensive programme of research.

• Charles Cotton, CIPD Reward Adviser
The CIPD’s in-house pensions expert. Author of the DTI’s Guide on Pensions Communications.
“Many employers who offer good pension schemes to their employees are letting the worst performers off the hook by failing to communicate with their staff and convince them of the value and importance of the pension scheme.”

• John Philpott, CIPD Chief Economist
One of the country’s leading labour market economists. Can comment on productivity of the UK workforce and other macro-economic aspects of the debate about pensions.
“Older workers’ satisfaction with work is declining faster than it should, at a time when UK productivity is also lagging behind our international competitors. The debate around pensions and retirement is not just about a funding time-bomb – get it right and employers and government could benefit from a major productivity boost.”

• Dianah Worman, CIPD Diversity Adviser
A leading expert on the practicalities and business benefits of workplace diversity. Led recent research on attitudes to older workers.
“Businesses benefit when they have people working for them with different outlooks and experiences. In a service driven economy it is also important to have a workforce that reflects the demographics of the customer base of the organisation. Organisations that exclude older workers risk reducing their competitiveness and ability to adapt to the changing world around them.”

• The Chartered Institute of Personnel and Development is represented on the government’s Employers’ Taskforce on Pensions, and wrote a guide for employers on pensions communications for the DWP – for further information visit: www.pensionsatwork.gov.uk/pensionscomms/pensionscomms.htm or www.employertaskforce.org.uk

• The Chartered Institute of Personnel and Development has over 124,500 members and is the leading professional body for those involved in the management and development of people.

Press Enquiries
Robert Blevin / Gerwyn Davies / Emma Price / Charlotte Richardson
Tel: 020 8612 6400
Mobile: 07793 256 763

• Enlarge text size
• Email a colleague
• Edit 'My profile'