[Injin]

http://www.guardian....t-65-phased-out

Quote

People will be encouraged to work longer under government plans to phase out the so-called default retirement age of 65 by October 2011.

Currently employers can make staff retire at 65 regardless of their circumstances, but ministers signalled this was set to change as people were living longer, healthier lives.

The proposal to phase out the default retirement age (DRA) is outlined in a consultation document, published today, which will run until October.

However, the government said bosses will still be able to operate a compulsory retirement age if they can "objectively justify it".

The move to phase out the DRA is one of a number of measures the government is taking to help and encourage people to work for longer against the backdrop of demographic change.

Other steps include reviewing when the state pension age should increase to 66 and re-establishing the link between earnings and the basic state pension.

The business department said the consultation also proposes to help employers by removing the administrative burden of statutory retirement procedures.

A department spokesperson said: "With the DRA removed there is no reason to keep employees' right to request working beyond retirement or for employers to give them a minimum of six months notice of retirement.

"Although the government is proposing to remove the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples could include air traffic controllers and police officers."

The plans provoked a mixed reaction. Campaigners welcomed the decision, but employers warned the removal of a default retirement age could make workforce planning more difficult.

Chris Ball, chief executive of The Age and Employment Network, called it a "win/win outcome" for employers, but warned that today's move is only a first step.

"Many employers will need to adopt a totally new mindset," Ball said. "They will need to actively plan and assist workers to be able to go on contributing to the success of their organisations.

"This may mean adapting work practices and work places. It will certainly mean providing opportunities to train or retrain and to work more flexibly, and, crucially, actually recruiting people in their 50s and 60s where they may not have done so in the past."

Rachel Krys, campaign director of anti-ageism group the Employers Forum on Age, said the default retirement age, which was created in 2006, was a "dated and unfair system".

"Its removal is simply common sense," she said. "With rising life expectancies, and people staying fitter for longer, it is archaic to assume that someone's age is an indicator of the contribution they can make to the workplace.

"Employers have nothing to fear from this change. This is an outdated policy and the removal of forced retirement is an opportunity to put policies and processes in place which make the most of an age-diverse workforce."

The Chartered Institute of Personnel and Development (CIPD), which has campaigned for many years to remove the DRA, said the "breakthrough" was "greatly encouraging".

Dianah Worman, the CIPD's diversity adviser, said: "Our research has shown that many employees wish to work past retirement for differing reasons and many employers are already benefiting from allowing such flexibility."

The Confederation of British Industry (CBI) said the proposals will give employers little time to prepare and leave them with unresolved problems. John Cridland, CBI deputy director-general, said: "Scrapping the DRA will leave a vacuum and raise a large number of complex legal and employment questions, which the government has not yet addressed. Employers and staff will not know where they stand. There will need to be more than a code of practice to address these practical issues; we will need changes in the law to deal more effectively with difficult employment situations."

David Yeandle, the Engineering Employers Federation's head of employment policy, said: "Many manufacturers will be seriously concerned about this change in policy, which will make workforce planning more difficult.

"The proposed timetable also gives employers virtually little or no time to alter their policies and practices before such an important change in employment legislation is introduced.

"There is also a real danger that it could open a Pandora's box with the onus being placed on employers to prove whether older employees are capable of continuing in their current role. Inevitably, this could lead to employment tribunal cases from some older employees who have been dismissed rather than allowed to retire."

Today, pensions minister Steve Webb admitted that people face a "hell of a shock" when they reach retirement because of their failure to save.

In an interview with the Independent, he admitted that the basic state pension of £97 a week is "not enough to live on", and confirmed that the government would raise the state retirement age to 66 earlier than planned. He said that around 7 million people are currently not saving enough to meet their retirement aspirations.

Fair play this article is a genius of spin.

State failure - you all know the tune by now.

[Sadman]

There goes the natural wastage get out clause.

[Minos]

Ain't it lovely when something compulsory is done away with. Good on ya Nick - good to see you doing away with those unwanted laws.

[hotairmail]

Minos, on 29 July 2010 - 02:50 PM, said:

Ain't it lovely when something compulsory is done away with. Good on ya Nick - good to see you doing away with those unwanted laws.

It did seem anomalous that the Basic State pension was going to start at 67 at some point - but you could be kicked out of your job at 65.

This way they can now postpone your pension forever.

[bendybogle]

Great news – so in 20 years we’ll have Johnny (BSc) ACCA Doc. MBE who can’t quite figure out why he can’t get that lucrative NMW job at Mc’Ds when father, grandfather and great grandfather all enjoy superb packages at the local council.

[miko]

bendybogle, on 29 July 2010 - 03:31 PM, said:

Great news – so in 20 years we’ll have Johnny (BSc) ACCA Doc. MBE who can’t quite figure out why he can’t get that lucrative NMW job at Mc’Ds when father, grandfather and great grandfather all enjoy superb packages at the local council.

Bang on

This is madness , they should be going the other way and geting older people out of the work force making way for the next generation.

[Rain'ard]

Win Win win for the employer. Thought so somehow. On the other side of the equals sign is Lose Lose Loswe for the employee.

As the op may or may not say "SLAVERY"

[SMAC67]

From Mish Shedlock:

Structural Demographics Poor
Structural demographic effects imply that prospects in the full-time labor market will be poor for those over age 50-55 and workers under age 30. Teen and college-age employment could suffer a great deal from (1) a dramatic slowdown in discretionary spending and (2) part-time Boomer reentrants into the low-paying service sector; workers who will be competing with younger workers.

Ironically, older part-time workers remaining in or reentering the labor force will be cheaper to hire in many cases than younger workers. The reason is Boomers 65 and older will be covered by Medicare (as long as it lasts) and will not require as many benefits as will younger workers, especially those with families. In effect, Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages.

Consider what such a decline in US GDP growth and its multiplier effect could mean for Asian growth, global trade, demand for commodities, and growth elsewhere in the world (BRIC).

The world equities markets have barely begun to discount the increasingly likely severe deceleration in US and world GDP growth ahead, including the secular Boomer drawdown of accumulated wealth of the past 25 yrs.

[Rain'ard]

Minos, on 29 July 2010 - 02:50 PM, said:

Ain't it lovely when something compulsory is done away with. Good on ya Nick - good to see you doing away with those unwanted laws.

Did Nick think of this just before the election.

Retrospective Nick

[satch]

bendybogle, on 29 July 2010 - 03:31 PM, said:

Great news – so in 20 years we’ll have Johnny (BSc) ACCA Doc. MBE who can’t quite figure out why he can’t get that lucrative NMW job at Mc’Ds when father, grandfather and great grandfather all enjoy superb packages at the local council.

The Boomers are more important than the younger generation and they need the work to subsidise their gold-plated pensions . Strange - massive unemployemt looming and the boomers occupy many jobs and in some cases can't be made redundant because it costs too much and to boot we increase the future pension liability.

[Redhat Sly]

The thing I don't understand about pensions, is why did they recently reduce the number of qualifying years to get one? It doesn't make any sense given the state of the finances.

I've paid 28 years and only 30 is required now so I would get 28/30 of whatever it pays (if anything). I haven't paid anything since 2004 as I don't think it's worth wasting money on as by the time I need one, it will be means tested or the cupboard will be bare.

[Minos]

Redhat Sly, on 29 July 2010 - 04:37 PM, said:

The thing I don't understand about pensions, is why did they recently reduce the number of qualifying years to get one? It doesn't make any sense given the state of the finances.

I've paid 28 years and only 30 is required now so I would get 28/30 of whatever it pays (if anything). I haven't paid anything since 2004 as I don't think it's worth wasting money on as by the time I need one, it will be means tested or the cupboard will be bare.

To give you the illusion were were getting something for nothing when infact you were going to have to work longer to get it. If you are young, when you get there it will probably have disappeared anyway. You'll learn how it works in the end.

[Bruce Banner]

satch, on 29 July 2010 - 04:26 PM, said:

The Boomers are more important than the younger generation and they need the work to subsidise their gold-plated pensions . Strange - massive unemployemt looming and the boomers occupy many jobs and in some cases can't be made redundant because it costs too much and to boot we increase the future pension liability.

I ask for nothing more than I'm entitled to after paying tax and NI for forty odd years.

I've been retired for nearly three years and have another six years to wait before I can draw my state pension. Fortunately, I was able to convert my private pension pot into an annuity when rates were reasonable.

I have never claimed any state benefit and still pay income tax on my pension and savings income, so please don't tar all boomers with the same brush.

[winkie]

How will companies be able to release the highly paid, pay rises compounded over many years....slightly stale and not up to learning new tricks....they will have to keep hold of them and pay them indefinitely.....employees rights. When they could have taken on two new graduates at the start of their career with far more to offer a company over time.

[Redhat Sly]

Minos, on 29 July 2010 - 04:40 PM, said:

To give you the illusion were were getting something for nothing when infact you were going to have to work longer to get it. If you are young, when you get there it will probably have disappeared anyway. You'll learn how it works in the end.

I've read today that the French are thinking of upping their pension qualifying years to 41.5