Compulsory retirement: an international comparison

There is no doubt that in the UK the average person is living longer and birth rates are falling. This has resulted in growing concern about the adequacy of pension arrangements as retirees are set to draw their pensions for longer and lower birth rates mean there are fewer workers contributing to the system to support them. In the UK, such concerns have resulted in an increase in the state pension age and the phased introduction of an auto-enrolment regime, which requires employers to enrol eligible employees in an approved pension scheme and make mandatory minimum contributions to such schemes. In a number of other countries, particularly in Europe, there has been a similar reaction, with Italy, France, Germany, Poland and Spain all increasing the age at which retirement benefits can be claimed.

In the UK, the concern about the need to work longer to save for retirement has also resulted in changes to an employer’s ability to compulsorily retire its employees. On 6 April 2011, the default retirement age of 65 at which employers could lawfully require their employees to retire was abolished. Compulsory retirement amounts to unlawful age discrimination unless the retirement can be objectively justified as being a proportionate means of achieving a legitimate aim. As a result, the majority of UK employers have chosen to abandon compulsory retirement altogether…

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