Government announces DRA's removal date
Under government’s announced proposals, the default retirement age (DRA) will be scrapped on 1 October 2011.
In the new conditions suggests a six-month transition period from the existing Regulations, following the announcement in the Budget that the DRA would be terminated from April 2011. Presently employers can obligate staff to retire at the age of 65 regardless of their circumstances.
In the proposals it is stated that from 6th of April 2011, employers will not be able to release any notifications for mandatory retirement using the DRA procedure. Consequently, during transition period (from 6th April and 1st October) only people who were notified before 6 April, and whose retirement date is before 1st of October can be compulsorily retired.
After 1st of October, employers will not be able to use the DRA to force employees to retire; if they want to use retirement ages they will have to present that they are objectively justified. Additionally, the recommendations suggest to help employers by removing the administrative burden of retirement procedures. Furthermore, when DRA will be removed there will not be reason to keep employees' "right to request" to work beyond retirement or for employers to give them a minimum of six months' notice of retirement.
Edward Davey, employment relations minister, admitted that the number of people who wants to extend their working lives, is growing, so government should not stop them just because of particular age restrictions. Therefore they want to give equal opportunities to all individuals and this would be one step closer to the end of this kind discrimination. They also are committed to give help and support in adapting to the change in Regulations. This consultation addresses the question of what kind of support are required.
Rachel Krys, campaign director at the Employers Forum on Age, emphasised that these are great news for individuals and a big step forward in overall employment practices. He also stated that this is an opportunity to put policies and processes in place which make the most of an age diverse workforce, and employers don’t have to be afraid from this change.
These changes also include the possibility of future guidance or a more formal code of practice on handling retirement discussions. Practitioners are also discussing whether removal of the DRA could have unexpected consequences for guaranteed benefits and employee share plans.
The consultation is open from 29 June until 21 October 2010. Department for Business Innovation and Skills has published summary of evidence and research from the Government's call for evidence on the DRA alongside the consultation document.