Pensions Briefing Note - Issue 3

Pensions Reform

Removal of the Default Retirement Age ("DRA")

Up until 6 April 2011, employers could require staff to retire at age 65. However, the DRA of 65 was removed from legislation from 6 April 2011, meaning that employers now need to objectively justify having a compulsory retirement age. There is a short transitional period to allow retirements to go ahead where employees reach age 65 before 1 October 2011.

Due to concerns raised during consultation, the Government has agreed that an exception will be made for group risk insured benefits (such as life assurance), so these can still be stopped at age 65 (rising in line with state pension age). The exception will not cover benefits provided on a self insured basis.