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Social Policy
Default Retirement Age to be Abolished

The government has confirmed that the default retirement age (DRA) of 65 will be abolished
from 1 October 2011 with phasing-in beginning in April.

Currently, an employer can lawfully retire an employee aged 65 or above provided the employer
follows a set procedure, requiring the employer to give at least six months’ notice of retirement to
the employee.  If the procedure is followed, then dismissal for retirement at age 65 will not be unfair
or age discrimination.  If the normal retirement age for the job is under 65, then provided the employer
can justify the lower retirement age and follows the same set procedure, any dismissal for retirement
will again not be unfair and will not be age discrimination.

Under the changes, the last day employees can be compulsorily retired using the DRA is 30 September
2011.  From 1 October 2011 no employee can be compulsorily retired by an employer because they
have reached the age of 65, unless that retirement can be objectively justified.  So the last day to
provide the six months’ notice required by the DRA provision is therefore 30 March 2011.

There will be transitional provisions between 30 March and 5 April 2011 and a chart showing how the
transitional arrangements will work is available on the ACAS website at www.acas.org.uk.

ACAS has also issued guidance which outlines the changes and provides advice on how employers
and employees can manage both the transition stages and new procedure.  The guidance covers
practical issues for employers in managing older workers and also issues such as succession and
workforce planning, performance management and ensuring consistency and fairness in their policies
and practices.

The changes will apply to all employers and all company sizes and sectors.  However, individual
employers will still be able to operate a compulsory retirement age provided that they can objectively
justify it.

The changes do not affect employees’ state pension age and entitlement, which may well be
different from the age at which they retire.