Following confirmation of the Government’s commitment to phase out the default retirement age (DRA) of 65 from 6 April 2011, the Chartered Institute of Payroll Professionals has expressed its support for its removal.
The Policy & Research team at the CIPP submitted its formal response back in October 2010 after consulting its members via a survey. The majority of respondents thought that the proposed transitional arrangements strike the right balance between the policy aim of quickly phasing out the DRA and respecting the position of employers who have already made plans based on its use.
Respondents also highlighted the need for a formal guidance on how employers could discuss retirement with their staff in a mutual beneficial way, as well as having a statutory code of practice which includes topics such as flexible retirement options and changes to duties and hours of work.
Therefore, the CIPP welcomes the new guidance for employers by the Advisory, Conciliations and Arbitration Service (Acas) that was published yesterday.
Elaine Gibson FCIPP MSc, Senior Policy Officer at the CIPP, said: “The Institute supports the Government’s move to abolish the DRA by 1 October 2011. It only seems reasonable that in light of societal changes and the fact that people are living longer, employees are provided the option of when they want to retire, rather than it being mandatory at the age of 65.
“The CIPP encourages payroll professionals to ensure that their payroll procedures are up to date to reflect these changes to legislation. Furthermore, payroll departments should consider implementing a process by which they can monitor retirement ages as they arise, either with the help of software or by a manual checking process.
“Finally, payroll departments also need to be aware that group risk insured benefits, such as income protection, sickness and accident insurance and private medical insurance, will be exempt. Therefore, it is possible for employers to cease providing or offering these benefits once a worker has reached the age of 65.”
To view the Acas Guidance for Employers titled Working without the default retirement age, go to: http://www.acas.org.uk/CHttpHandler.ashx?id=2976&p=0
