10.07.09

Supposed Benefits of Mandatory Retirement Undermined by New Survey

A new survey conducted by TAEN and the Employers Forum on Age (EFA) undermines the argument that there are benefits to business when workers are forced to retire at 65.

The survey of nearly 200 HR professionals found that almost two-thirds (64%) of employers who operate a mandatory retirement age (MRA) agree that it can lead to a loss of valuable knowledge and talent.

Among those organisations who have removed the mandatory retirement age, more than three-quarters considered it a positive step for their organisation and said it helped maintain valuable skills and their organisation’s customer-facing image and reputation.

The survey highlights comparisons between those with and without a mandatory retirement age (MRA) policy and concludes that the advantages of having an MRA have been exaggerated, while organisations that have dispensed with an MRA are managing well and have discovered genuine business benefits in their decision.

The results undermine the case that there are strong business benefits in having an MRA, pressed on the Government by the Confederation of British Industry (CBI) when the Employment Equality (Age) Regulations were introduced almost three years ago.

Chris Ball, Chief Executive of TAEN – The Age and Employment Network, said: “The survey shows that the arguments against repeal of the NDRA do not correspond with reality. Most employers, even those that have mandatory retirement ages, say it is of no help in dealing with under-performing employees. Yet this was a major reason for the national default retirement age when the regulations were introduced.

“Similarly, while organisations with mandatory retirement ages say it helps their succession planning, those who have got rid of mandatory retirement say they get on fine without it.

“Altogether, these results question the much vaunted business benefits of mandatory retirement - advanced by the Government and the CBI.  Employers who have abandoned it are experiencing real advantages. When we look at these organisations, we find the dire warnings by ageist commentators are shattered shibboleths.”

Denise Keating, Chief Executive of the Employers Forum on Age, added: “This survey confirms the EFA’s experience that we are on the verge of a major shake-up in the way we manage people as the population ages. The concept of retirement is outdated; it does not reflect how we live our lives today.

“Many people make a good contribution at work and only short-sighted organisations would risk removing talented people just because a milestone birthday is approaching.  Interestingly, even those organisations with an MRA would allow people to work on – unfortunately, the majority of them appear to then apply a further level of discrimination by only allowing this to happen ‘sometimes’.

“Many employers, from SMEs to very large and complex organisations, have taken the view that there are no insurmountable barriers to removing retirement ages and are in fact experiencing significant benefits.  We have to work with the rest to overcome their fears”.

The research comes a little more than a week before the British High Court will reconsider the Age Concern and Help the Aged legal challenge to compulsory retirement referred back to it by the European Court of Justice.

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