The scrapping of the Default Retirement Age (DRA) has led to an increase in the number of older employees in the job market. Image courtesy of: sxc.hu
The abolition of the
Default Retirement Age (DRA) last year means that employers can no longer force employees to retire at a specific age unless this can be objectively justified. This has brought a broadly positive response from employers according to research from
Group Risk Development (GRiD), the trade body for the group risk industry.
Almost a quarter (23 percent) of employers questioned believed that removing the DRA would enable them to retain the best talent within the business, with 12 percent saying it would increase diversity in the workplace. A further 19 percent said they had already encouraged staff to work beyond retirement age before the DRA was removed.
Managing absence levels among older workers emerges as the only significant issue marring employers’ enthusiasm for reform. The research shows that 17 percent of companies are worried about their older workers being fit and able to do the job, whilst 11 percent believe it will drive up sickness absence costs with knock on impact for the whole team. A further eight percent said they were worried about managing the capability process (performance management/appraisals) fairly.
Katharine Moxham, spokesperson for GRiD, commented: “Older employees can bring so much in the way of experience, confidence and mentoring skills to a business so it’s great to see employers recognise the benefits of an “ageless” workforce. However, as our survey demonstrates, one potential bone of contention is absence management.“
“Put simply, businesses fear that older workers are more likely to be sick than their younger colleagues and will have less incentive to return to work. It’s for this reason that the group risk industry worked with Government to ensure that businesses can take the same practical approach as the State does with working age benefits (which cease at
State Pension Age).
“Employers are therefore not actually obliged to extend provision of insured protection products (such as Group Life Assurance, Group Income Protection and Group Critical Illness) beyond age 65 or State Pension Age, as this increases.
“For those employers who do choose to continue these benefits to their staff beyond age 65, group risk providers can be flexible in accommodating a range of upper ages or other solutions – such as a limited payment period under a group income protection policy.
“By allowing employers choice in their approach, the Government has ensured that Group Risk protection benefits will remain affordable and available to the majority of those employees who most need them.“
Sadly, 57 percent of respondents were unaware of the exemption which can help keep overall protection costs down and give businesses more flexibility to retain these socially useful benefits.