Jock's Backroom Blog

Views from the Backroom, and the Classroom, at Oxford Brookes University

Mandatory retirement age: what do you think?

Posted by Jock Coats on 14th December 2009

I’m accompanying a colleague to an appeal hearing on Thursday to review a decision not to allow them to continue working after their 65th birthday. So I’ve been doing some reading around the subject. I went into it believing that there should not be a mandatory retirement age at all; that the default position ought to be that people should be able to work for as long as they like and are able to do so. The discovery process has not changed my mind one bit, but some of the information I’ve gleaned helps to make that case more strongly.

I’ve always felt that one area in which Higher Education Institutions have been quite good at, indeed “ahead of the curve” is in employment rights – maybe more experienced UNISON negotiators would disagree? But in this case, I think they are lagging behind at least opinion, if not general practice in the rest of the labour market. Anyone who has paid any attention to the issue will be able to rehearse some of the problems we are stoking up for the future:

  • that we are living longer and healthier;
  • that the proportion of older people in the population is now greater than the younger generations in future can probably sustain on pensions;
  • that our savings rate as a nation is abysmally low which means many people, even a generation after the rise of private pension provision, are still as reliant as ever on the one state pension and credits; and
  • that at this particular time at least, the economic crash, coupled with the earlier government decision to raid pension schemes for spending money means that even those who have saved in private, or indeed occupational, schemes are now facing much lower pay-outs than they expected.

And nor should any decision to work longer be forced on someone based on impending poverty or other negative reasons, but that there is compelling evidence to suggest that working longer keeps you healthier, and particularly mentally alert, and is likely to keep problems such as Alzheimer’s disease at bay for longer. Personally, I think the UK pensions system, if not the entire tax to welfare model, is fatally flawed and we are probably very lucky to have seen it last the three generations or so since it began in earnest. And if nobody has the political will radically to reform the way we provide for ourselves for times such as retirement (but also things like time off for raising a family and similar), then the least we can do is to make it easier for people to defer their pensions till a little later if they wish, accrue some more benefits and soon. And this looks like it will be the line governments will be taking over the next few years, and that exemplary employers ought to be ahead of the game on this one too.

Website of the Centre for Diversity Policy Research and Practice @ Brookes

Website of the Centre for Diversity Policy Research and Practice @ Brookes

Indeed HEFCE funded research conducted just a year ago now by our very own “Centre for Diversity Policy Research and Practice” a part of the Human Resources Directorate that makes the policy on retirement, suggests that universities as a whole are lagging behind the opinions and expectations of their own workforces. Even the “traditional” reasons for maintaining a fixed retirement age are rejected, including by staff whom they would once have been designed to benefit – younger workers at the start of their careers for whom older colleagues retiring could provide a route to faster career development and promotion. A majority of respondents, again across all age groups, believe that a mandatory retirement age is in fact discriminatory against older workers, and reject the idea that it is essential to maintain such an age in order better to manage their workforces.

As a result of the recent European and High Court decisions in a case brought by Heyday, the membership wing of Age UK, which ruled that it was not discriminatory to insist on a fixed retirement age when the most recent 2006 legislation was brought it but that it was looking increasingly unsustainable now, has prompted the government to bring forward its next scheduled review by a year to 2010. And it is long term government policy that a fixed retirement age should be scrapped completely.

Other evidence in the CDPRP report suggests that for different types of employee a one size fits all policy is not satisfactory, in that reasons for keeping on senior academic staff are often different from reasons why manual staff may want to stay on. For example, there may be no problem in recruiting replacement manual staff at a similar skills level to the retiree, and they may not have particularly precious skills we need to retain strategically, yet the same decision criteria apply. It suggests that the recent legislation granting the right to request to stay on, and the duty on employers to have a consistent policy to apply to all employees may have disadvantaged manual workers compared with the position before that legislation.

Senior respected law firms have been advising in human resources circles that employers should now be thinking ahead and changing their policies in advance of any likely government mandated change as a result of the 2010 review. It seems very unfair to force someone to retire who, within a year may be either under the default retirement age or not subject to one at all. The Higher Education sector’s “Equality Challenge Unit” is suggesting that at the very least the way policies are implemented should be reviewed so that requests to stay on are by default viewed positively. So rather than having to justify why someone ought to be allowed to remain after 65 against a bunch of potentially discriminatory criteria, institutions should perhaps look at saying that they will justify why they shouldn’t be allowed to stay on instead.

Clearly these current policies affect manual and less skilled workers more than anyone – they are more likely to be low paid, and to have insufficient pension income to live comfortably. Though this is a sad indictment of the pensions system which today sees people on a lower proportion of the average wage (16%) in retirement than even in 1908 when the first state pensions came into effect (18%). Not only that but highly skilled workers are likely to be more able to do other remunerative work even if they have to leave their main employer – self-employment, consultancy, part time roles such as directorships and so on. Manual and lower skilled workers are less likely to find anyone else to employ them (it remains legal not to employ someone who is close to or over the employer’s retirement age) or have the skills to set up on their own.

Yet ironically, Brookes must have been better at this in the past – at the last count all 12 of our over-70 employees were is Estates and Facilities Management, and over half (25/44) of those employed between 65 and 69 were likewise from this department which has the largest proportion of manual and lower skilled staff in the university.

So, what do you think? Do you expect to be retiring in a decade or two at 65? Or are you one of the many people now resigned (or just wanting) to work beyond 65? Should we be reviewing our policy now, ahead of the government, but inline with a majority of staffs’ opinions? And if so, should we make a decision now to allow all reasonable requests to stay on by default until after either we conduct a review of our policy or the government review delivers its conclusions?

Disclaimer.

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