The Government has confirmed that the Default Retirement Age (DRA) will be abolished, in line with earlier announcements on the subject.
Employment Relations Minister Edward Davey said, “Retirement should be a matter of choice rather than compulsion – people deserve the freedom to work for as long as they want and are able to do so.
“Older workers can play an incredibly important role in the workplace and it is high time we ended this outdated form of age discrimination.
“We are putting in place support to help business adapt to the change, but it is important to remember that about two-thirds of employers already operate without fixed retirement ages – and many of those with retirement ages already offer flexibility for workers to work longer.”
The DRA will be phased out between 6 April and 1 October 2011.
The Advisory, Conciliation and Arbitration Service has published a useful flowchart illustrating the transitional arrangements and guidance entitled Working Without the DRA.
Concern had been expressed that removal of the DRA could lead to increased costs and uncertainty for businesses by effectively removing the cut-off point beyond which certain benefits are not available to employees. To this end, the Government is introducing an exception to the principle of equal treatment on the grounds of age so that there are no unintended consequences for employers that currently voluntarily offer group risk insured benefits such as life assurance, private medical cover, income protection and sickness and accident insurance.
After the DRA has been abolished, it will still be possible to maintain a compulsory retirement age where this can be objectively justified.