THE Age Regulations which came into force on the October 1, 2006, introduced a new default retirement age of 65.
This effectively allowed employees to work beyond their normal contractual retirement age. It meant that effectively employers could only retire an employee earlier if they could “objectively justify” a lower retirement age.
However, on January 13, 2011, the Department of Business Innovation and Skills confirmed the phasing out of the DRA between April 6 and October 1, 2011.
The change means that from April 6, employers will not be able to issue notifications for compulsory retirement using the DRA procedure.
Between April 6 and October 1, 2011, only those people who were told before April 6, 2011, and who are due to retire before October 1, 2011, can be compulsorily retired using the DRA.
In other words, this legislation will make it illegal for firms to forcibly retire older workers if they are still capable of performing, while those who want to retire will still be allowed to do so.
Interestingly, the Government has taken into consideration employer concerns regarding group risk insured benefits.Š
The revised draft regulations specify that it is not unlawful for an employer to bring to an end employer-provided insurance when the employee reaches the age of 65 or the State Pension Age, whichever is highest.
This exemption will therefore cover employer-provided group risk insured benefits such as Group Income Protection, Group Life Assurance and Group Private Medical Insurance.
The Government’s decision will provide employers with the peace of mind that they can financially support their staff for the long term, through the provision of comprehensive employee benefits within their budget constraints.
Given the current legislation changes, now is a perfect time for all companies to review what employee benefits they currently offer their staff and look at other ways of rewarding staff in addition to salary.