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The bell tolls for the DRA

13 January 2011

The government has today confirmed that the default retirement age will be abolished from 1 October 2011. Employers will not be able to issue new notices of retirement under the current rules after 5 April this year.

Individual employers can still operate a compulsory retirement age, provided that it can be objectively justified, although uncertainty remains over what employment tribunals will accept as objective justification. In response to concerns raised by employers, the government will introduce an exemption to the principle of equal treatment on the grounds of age, where group risk benefits are provided by employers. This will allow employers to withdraw such benefits after 65.

Employers who might have held back from performance managing staff nearing retirement, can no longer afford to do so, even if they are expected to retire in the next few years. In some cases, this may mean beginning a performance management process with employees who have been under-performing for quite some time.

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