No more Default Retirement
Age (DRA)
From 6 April 2011, the Employment
Equality (Repeal of Retirement Age Provisions) Regulations 2011 (snappy!) will
delete the statutory provisions which currently allow a default retirement age
of 65.
The Regulations will also
delete provisions saying that retirement is a fair reason for dismissal and the
current procedure to inform an employee of the employer’s intention to retire
him or her and the duty to consider requests to stay on.
The Regulations are subject
to transitional arrangements that will allow retirements to take place on or
after 6 April 2011 in circumstances where:
- the
employer will reach 65 by 30 September 2011; and
- the
employer gives notice of retirement to the employee under the DRA notification
procedures on or before 5 April 2011.
Right to ask to stay on
In this transitional case,
the employee still has the right to request an extension, and an extension of
up to six months can be added to the retirement date notified under the transitional
provisions. (An extension of any longer than this would mean that the
retirement would fall outside the transitional provisions.)
This means that the
long-stop date for retirements under the transitional provisions will be 5
October 2012 (i.e. six months after the twelve-month notice of retirement that
must be given by 5 April 2011 at the latest.)
Insured benefits
The regulations contain a
significant new exemption from age discrimination law in relation to insured
benefits. It will not be unlawful to provide access to ‘insurance or a
related financial service’ only to employees aged under 65 (or State Pension
Age, if greater).
While the State Pension
Age is still 65, the exemption itself only applies to:
- ceasing
benefits at 65; or
- restricting
benefits to the under-65s.
This may create challenges
for employers who have extended cover for employees they have allowed to stay
on under the existing procedure.
This exemption is
restricted to the insurance/service being provided by way of an arrangement
between the employer and a third party insurer, with a specific provision for
employers who are themselves insurance providers. This means the exemption
won’t necessarily cover employers who self insure. |
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