Retirement

Recent legislation has affected retirement policies significantly.  It is now even more important to have clear retirement policies in place.  There is no automatic retirement age, although it is still permissible to have a default age. 

However it is important not to discriminate and therefore there should be no distinction between retirement ages for women and men.

All employers now have a duty to consider requests from employees to work beyond any standard retirement age.  Frequently this is still age 65.

Your policy should alert employees that they are approaching retirement age 12 months before the date.  You should not inform them earlier.  You must inform them at least 6 months before the due date.

You need a procedure or system to alert you that the date is approaching; it is no defence to say that you forgot or were too busy! The procedure should include a letter to back up any oral notice and so that you have a written record on their personal file.  In the letter you must inform them of the right to be considered to continue working beyond the retirement age.

If employees do ask to be considered, as an employer you have a duty to consider the request.  You should meet with the employee and give them the right to be accompanied by a colleague or friend.  The companion should not be a lawyer or otherwise legally qualified.  Neither should they be working in any capacity for you as the employer, except as a work colleague.  After due consideration, you need to inform the employee of the decision.  If the request is declined, you need to provide reasons in writing for that decision.

If you accede to the request, you need to follow this up in writing and it is best practice to have the employee sign and return a copy of the letter or form.  Once a new retirement date has been agreed, the employee cannot change the request to another further date.

A new retirement date will then apply and you need to give written notice between 12 and 6 months before the new date is due.  The employee then has another opportunity to ask to be considered to continue working. 

There are penalties if you do not give sufficient notice of pending retirement. The only exception is if the extension is less than 6 months in which case you do not have to give further written notice.

Further information: check out the ACAS website in the Links section. Their useful guide 'Age and the Workplace' can be downloaded as a PDF document.  Also Business Link has some helpful advice.

Contact us if you want help or specific advice on drafting or revising retirement policies.

 

 

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