Will you still need me?
The Beatles were singing about reaching 64, but since 6 April there is no choice – you can no longer require someone to retire when they reach 65. Many businesses already operate without a fixed retirement age, so they will have a relatively easy transition. But for others, there may be many questions:
How many employees will postpone retirement? Research suggests that nearly two-thirds of employees will postpone retirement, often because they have made insufficient pension provision.
What about pensions? Employees can claim the state pension and continue to work, or alternatively defer their pension in return for future enhanced benefits. You should consider reviewing the terms of any workplace pension scheme to support flexible later retirement.
Should I offer flexible working? Claiming the state pension and opting for flexible, part-time, working will be a popular option for many employees. However, be careful of discrimination if flexible working is offered to older workers and not to others.
What can I do about an older worker who is underperforming? The only way you can remove an underperforming worker is by using the fair dismissal procedures that apply to all employees.
Can I have an employer-justified retirement age? Yes, but only in exceptional circumstances where such an age can be objectively justified – and this may be a difficult test to pass. To date, such retirement ages have mainly been used to retire people under 65, such as where a job requires a significant level of physical fitness.
Should I change my health and safety procedures? No. In fact many employers report that older workers tend to have fewer accidents.
Do I have to have retirement discussions with my employees? There is no requirement to do this but you may find it helpful. Be careful of discriminating by singling out just older workers for discussions.
What about employee insurance and benefits? Group risk insured benefits such as income protection, life assurance, private medical cover and sickness insurance can cease when an employee reaches 65 (or the state pension age if higher), but not other benefits such as employee share schemes.
Where can I get more information? The Advisory, Conciliation and Arbitration Service (ACAS) and the Department for Work and Pensions websites have a range of relevant publications: www.acas.org.uk and www.dwp.gov.uk/age-positive