Government
proposals to abolish compulsory retirement at 65 put the issue of ageism under
close scrutiny
The
nature of retirement needs to change to reflect the evolving shape and
demographics of the 21st century workplace. There is nothing new in this.
Members of the Employers Forum on Age have for a number of years campaigned for
flexible retirement.
Last
week’s headlines announcing government plans to scrap the fixed national age of
retirement is part of this debate. The wide media coverage is encouraging, not
just because it raises awareness of forthcoming legislation on age
discrimination, but also because it creates a public debate about retirement
ages that desperately needs to be heard.
The
UK economy can no longer afford the culture of early retirement that has built
up since the 1980s – and many individuals can no longer afford to retire in
their 50s, even with a modest occupational pension.
Removing
mandatory retirement is not impossible. It has been done successfully in New
Zealand and the US after a significant period of transition. To date we have
heard nothing to suggest that UK employers would not be allowed the same
transition period to enable them to adjust policies and manage employee
expectations and culture.
Abolishing
mandatory retirement at 65 requires extensive discussion with employers,
because it signifies a major shift in the way many run their businesses.
Managing
the process of retirement sensitively should not be considered impossible.
Enlightened employers are developing policies that allow staff to continue
working for as long as they wish and are able to do the job. Well-designed and
effective management and appraisal systems should overcome most concerns.
Some
employers may think abolishing mandatory retirement will impact on their
ability to manage a flow of new employees into the workforce. They may also
argue that they will be forced to tackle declining performance in older
workers, whereas before they may have taken a less stringent approach in the
run-up to retirement.
But
the EFA notes that employers – particularly the larger ones – should be able to
manage the size and balance of their workforce as well as the performance of
all employees, irrespective of age.
The
EU employment directive does allow exceptions within domestic legislation, and
over the next five years we need to have a comprehensive debate on where
discretion is appropriate.
Age
is never going to be a simple discrimination issue. It affects everyone at
different stages in their working lives and while it should not be used as a
proxy for performance, we must acknowledge that as people become older their
expectations and ability to do some types of work changes.
Working
culture also needs to change. Today’s workplace is characterised by “burn-out”
at 50 and the demand by many employees to get out as soon as they can afford
to. With serious skills shortages, and fewer young people coming into the
workplace, this is an unsustainable situation.
Before
the debate on extending working lives commences, we need to get the issue into
perspective. Not only are there strong social and economic reasons for
encouraging people to work longer, but many individuals who have passed their
normal retirement ages are still perfectly able to fulfil their duties. There
is no rational reason to exclude them from employment.
The
concept of retirement at 65 was created in very different circumstances to
those that exist today. People are healthier, live longer and the workplace is
less physically demanding.
People
have children later and at 65 may still be putting them though university or
paying a mortgage. Flexibility will suit most individuals and employers – we
are not talking about forcing people to work to their dying day.
Allowing
people to retire when they choose presents a solution to the economics of
demographic change that will suit employers and individuals. The key to the
successful abolition of mandatory retirement is flexibility and choice.
It
is clear there are numerous issues to consider before mandatory retirement can
be abolished. But the EFA is delighted that this very debate sends a clear
signal that individuals have a valuable contribution to make beyond 65.
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Sam
Mercer is the campaign director of the Employers Forum on Age
