Default Retirement Age

The draft regulations on the abolition of the default retirement age were published on Thursday 18th February.

There had at the time of publication already been considerable confusion about what employers can do and by what dates they must take particular steps. Unfortunately, the fact that the Regulations are still in draft form means that the position on some of the points may change between now and 6th April, when they are expected to come into force.

However the position under the current draft is as follows:

1. The last date for an employer to give notice of retirement will be 5th April 2011. Provided the employer follows the existing statutory retirement procedure the dismissal will be for retirement and therefore fair and not discriminatory.
2. It was thought that employers would be able to give no more than six months' notice, expiring no later than 30th September 2011. The draft Regulations permit up to 12 months' notice to be given, meaning that the employer's notice of retirement must expire no later than 5th April 2012.
3. However if the employee makes a request to retire at a later date, under the existing statutory retirement procedure, the actual date of retirement could in theory be postponed to 30th September 2012 if the employer agrees.
4. Taking points 2 and 3 together, contrary to what the Government has said previously, there will in fact be dismissals for retirement after 1st October 2011.
5. The person whom you wish to retire must reach their 65th birthday on or after 6th April 2011 but before 1st October 2011. The inclusion of the 6th April date is new and on the face of it would appear to be an error as it will rule out retiring anyone by notice given after 5th April 2011 who is already 65 at that date (as well as those who do not reach 65 until after 1st October). It is difficult to see the logic of this. The Government has given conflicting indications over the past few days about whether it intends to make an amendment, but until the final Regulations are published this point will remain uncertain.
6. It had previously thought that employers might need to use the provisions for giving 'short' (ie less than 6 months') notice of retirement to stay within the transitions provisions. However there is now no need for this as the draft Regulations confirm that employers can give between six and twelve months' notice by the 5th April deadline.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.