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The Actuary The magazine of the Institute & Faculty of Actuaries

Hey ho, hey ho, it’s out of work we go

The High Court has decided in the Heyday case that a default retirement age of 65 can be justified. Employers can continue to require employees to retire at 65 without being found to have been discriminating on the grounds of age. A number of lobbyists have argued that EU law should not allow an employee to be forced to retire at age 65. The European Court of Justice confirmed that a national retirement age is permitted as long as it can be justified, for example to facilitate workforce planning.

The High Court was left to decide whether the government could justify the UK’s default retirement age and has accepted that the government’s desire to protect the integrity of the labour market was sufficient to justify the adoption of the default retirement age. On balance, in 2006 it agreed that it was proportionate to choose 65 as the default retirement age. In the short term, employers will be hugely relieved by the decision. Hundreds of retirement-related age discrimination claims currently before employment tribunals will be dismissed.

However, according to Lovells, “This sense of relief seems certain to be short-lived. The High Court reluctantly accepted that 65 was the appropriate retirement age and clearly thought that a higher age such as 68 or 70 would have been more consistent with the purpose of the regulations.” The government has already said that it will conduct a review of the default retirement age in 2010 to see whether it is still appropriate and necessary. It seems almost certain that the retirement age will rise at that point, if it survives at all.