Retirement policy hold ups leave HR hanging in limbo

Government delays in deciding a policy on mandatory retirement are creating
difficulties for HR departments.

Industry observers expected the Government to outline its policy on mandatory
retirement earlier this year, but Whitehall departments are still considering
whether to standardise retirement at 65, extend it to 70, or abolish it all
together.

A spokesman for the Department for Work and Pensions said: "A lot of
the detail is led by the DTI. It is in discussion at the moment, reviewing the
timetable for further consultation, and will announce a further timetable in
due course. We cannot say if it will be weeks, or longer than that."

Before the end of 2006, businesses must comply with age discrimination
issues as set out in the EU Employment Directive. The directive gives the
Government some discretion over how this is implemented, but it has yet to
announce its policy.

This leaves organisations little time to consult unions and employee
representatives before putting their own measures in place, according to Owen
Warnock, partner in the HR group at law firm Eversheds.

David Yeandle, deputy director of employment policy with the manufacturers’
organisation EEF, said employers were very concerned about the delay. He wants
the Government to maximise the time between the final regulations being
available and the implementation deadline.

The EEF has called for a default retirement age of 65 – the current
pensionable age for most staff – and has urged the Government not to introduce
a retirement age greater than 65. Although most people now choose to retire at
65 or earlier, this may not be the case in 2010, when the state pension might
be less attractive and private pensions less generous, Yeandle said.

"It could make life much more complicated because HR departments will
not know when people are going to leave, and how they can plan for
succession," he added.

By Lindsay Clark

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