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Home» Business » Default retirement age to be phased out by Oct 2011

Default retirement age to be phased out by Oct 2011

Posted by admin - March 17, 2011 - Business

Retirement ageIf you have employees who are 65 or over on 30 September 2011, you must give them notice of compulsory retirement by 5 April 2011.

The notice period must be between 6 and 12 months. The latest date therefore for your employees to retire would be 4 April 2012.

Your employees can request to work beyond the date but only if they have made a request before 5 January 2012. Provided the extension is no more than 6 months you will not run the risk of adverse claims when they finally leave.

If an employee requests for their retirement to date to be postponed, the latest date you can retire them is 3 October 2012.

Employers will need to consider whether to keep a fixed retirement age after October 2011 or to have no fixed retirement age at all.

In that case, employees reaching 65 will continue to work on or they can retire voluntarily at a time of their own choosing. All employers will be treated the same regardless of age but any dismissal would still have to be for a fair reason and follow a fair dismissal procedure.

Steps you need to consider to prepare for the phasing out of the default retirement age:

  1. Undertake a workforce planning exercise by completing a workforce audit by age and structure and examine staff turnover rates.
  2. Adopt a consultation procedure to discuss with employees their aspirations and plans for the future.
  3. Liaise with workforce committees or other bodies to discuss their views about fixing the retirement age or having no fixed retirement age.
  4. Consider the current policies in place to deal with capability, performance, appraisals and training.
  5. Review all employment related documentation to delete any reference to age.
  6. Review the capability, performance and appraisal policies to ensure they are robust but fair.
  7. Consider any other associated documents such as share option plans to ensure they are not discriminatory.
  8. Consider the benefits provided to employees such as health insurance cover and whether these should and can be provided for all employees.
  9. If a compulsory retirement age is to be operated, all the evidence to support this should be collated and the reasons documented, so it can be objectively justified as a proportionate means of achieving a legitimate aim if challenged.

For fresh ideas, new possibilities and a value driven service go to Garside & Co LLP Chartered Accountants in London.

Related posts:

  1. EU Court of Justice rule that UK’s compulsory retirement age is legal
  2. 2010 self assessment deadlines
  3. New employment laws effective April 2009

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