Although employing and retaining an age diverse workforce has real business benefits, it is equally important for organisations to have flexible retirement and retirement policies in place.

This booklet will not provide you with in-depth advice and will not guarantee any level of compliance with age regulations. However, we understand that many small and medium businesses don’t have dedicated Human Resources (HR) facilities, so we have developed this booklet to provide some practical information and help for employers of all sizes. It provides examples of how other small, medium and large organisations are managing their ageing workforce.

If you have any specific questions relating to finance, pensions or the new regulations, you will need to talk to a financial or legal adviser or to Advisory, Conciliation and Arbitration Service (ACAS). Other sources of help and information are also included in this booklet on page 13.

Age Legislation

As an employer, you need to be aware how the new Employment Equality (Age) Regulations 2006 affect retirement and pensions. The law covering retirement was implemented 1 October 2006; pension age regulations came into force 1 December 2006.

The regulations make it unlawful to discriminate against employees, job seekers and trainees on the grounds of age.

The regulations cover workers of all ages and all employers.

They cover all employment and vocational training, including access to help and guidance, recruitment, promotion, development, flexible working, retirement, redundancy, pensions, perks and pay.

What this means for you

Simply put, the new regulations mean that you need to:

• look at your existing retirement policies and practices and consider if they require change
• consider whether flexible retirement options would be beneficial to your business and your staff and
• check that your pension scheme and any policies, practices or routines you operate are compliant with the new legislation.

Remember, there is no official retirement age in the UK – the new age law introduces a ‘default age of 65’ but this is not a mandatory retirement age.

Download Flexible Retirement and Retirement: Age Positive Guide

PDF format, 593KB, 16 Pages.

Contents
Flexible Retirement and Retirement
Introduction 1
Age Legislation 1
What this means for you 1
Retirement 2
Business benefits of a flexible retirement policy 2
Top tips and checklists for you to make your retirement policy more age positive 4
Checklist – Retirement: General good practice 4
Checklist – Flexible retirement – Good practice tips and techniques for employers 5
The retirement process 7
Understanding the new retirement process 7
Fair retirement flowchart – courtesy of ACAS 11
A changing workforce for employers 12
Age Positive Retirement: answers to your questions 12
Sources of additional information 13

Age Positive Retirement: answers to your questions

1. What do the new age regulations say about retirement?

The regulations set a default retirement age of 65 (to be reviewed in 2011). This means compulsory retirement below the age of 65 is unlawful unless you can satisfy the test of objective justification.

2. Does this mean it is compulsory to retire all staff at 65?

No, although you cannot forcibly retire anyone before 65, it isn’t compulsory to have a retirement age – in fact many employers don’t have one. Employers can choose whether they have any retirement age at all – the law doesn’t require it and in many cases it’s just an historical relic of the company’s previous policies and practices that hasn’t been updated.

If you choose to use a fixed retirement age you will have new time-bound responsibilities to inform employees of their retirement date and their ‘right to request’ to work beyond. However, if members of your staff choose to leave or retire prior to age 65, that is also their choice, you cannot force them to remain in employment against their wishes.

3. Do I need to consult employees who are 65 or over before retiring them?

Yes, you must inform your employees a minimum of six or a maximum of 12 months before the date you plan to retire them, regardless of any previous discussion or review.

4. Are there any changes, which will affect my employees?

Yes, all employees will have the ‘right to request’ to work beyond the default retirement age of 65 or any other retirement ages set by you, and all employers will have a ‘duty to consider’ requests to work longer.

5. What happens if I refuse to allow an employee to work past 65?

If you correctly follow the procedures laid down in regulations, you may rely on the default retirement age without the dismissal being regarded as unfair or age discriminatory. However, if you do not follow the process the employee could challenge the decision as unfair dismissal.

The regulations are not designed to force you to retain staff that are unsuitable, however, it is also not good business sense to dismiss individuals based solely on their age – in many cases retaining older workers can be mutually beneficial to both parties.

6. Is there anything else I need to do to make sure I act in accordance with the new regulations?

Review your practices now and make sure you’re familiar with the guidance on the retirement process. Seek advice if you have concerns. If you don’t have access to your own HR department or to independent legal advice, ACAS is the nominated agency to give advice and guidance on age issues. Contact their Helpline on 0845 7474747 or go online at www.acas.org.uk 

Good practice, help and information is also available on the Age Positive website at www.agepositive.gov.uk or look at any of the other sources of help and information listed in this leaflet.

Remember – if you discriminate and lose your case, there is no limit on how much an employment tribunal can ask you to pay.

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