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Out with retirement, in with uncertainty

18 February 2011

The Government has published draft regulations removing the default retirement age.

Those employers who were concerned about the provision of employees insured benefits, such as life assurance and private medical cover beyond 65, have been catered for with a provision that it will not be age discriminatory if an employer does not offer these benefits to employees over 65.

The retirement procedures previously in place have been completely abolished. Employers are now left almost entirely unguided as to how they can fairly retire an employee, if at all. The ACAS guidance looks at the issue of an employee who is not performing well at age 65. Their suggested options of either a ‘work place discussion’ involving asking about the employee’s retirement plans or dismissing on the grounds of capability, are not satisfactory. For those who are brave enough to rely on the ‘Employer Justified Retirement Age’, ACAS’s assurance that guidance will soon be provided because ‘case-law will develop’ is not particularly helpful.

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