On the three year anniversary of the abolition of the Default Retirement Age (DRA), a new report from Jelf Employee Benefits and retirement workshops specialist LaterLife Learning, suggests that compliance with the spirit of the new rules varies significantly across UK employers: less than a third (29 percent) of older workers have been formally told about their right to continue working past the (now abolished) DRA, with more than half (51 percent) only becoming aware of this as a result of media coverage.
Another striking finding is that even when employment does continue past age 65, employees may find that they have fewer company-sponsored benefits than before. The survey found that more than one in five employers (21 percent) restricted some staff benefits once age 65 had been passed. The 2014 Jelf Employee Benefits Survey sought views from employers, employees considering retirement, and recent retirees on age-related retirement & pensions issues, and also highlighted that: 1 in 5 employers do not explicitly inform employees who have passed age 65 that their benefit provision may be changing. 43 percent of employers are not aware of their insurers’ maximum age limits for Group Risk employee benefits.
Whilst there may be no explicit employer requirement to communicate to employees their right to continue working, or to continue to offer all benefits to older workers, it should perhaps be expected that most organisations would have informed their entire workforce of this change in advance, and probably shortly after, the abolition of the Default Retirement Age. If such announcements were made by employers, it appears that they have not been made well. The majority of employees – and in particular those older employees who are more immediately impacted by this change – have failed to understand the implications.
It also raises questions as to whether employers have fully embraced the new legislative landscape, for instance by updating terms and conditions and contracts of employment. Steve Herbert, head of benefits strategy at Jelf Employee Benefits said: “It is extremely concerning that three years on since the DRA was abolished, there is clearly some significant disparity in how this change is being managed by employers and communicated to employees. In a worst case scenario this could leave older employees vulnerable and under-insured, and/or employers effectively self-insuring the risk. The report findings suggest that many employers will need to urgently review their strategy and thinking around retirement issues.”
Commenting for LaterLife Learning, managing director Tony Clack said:“Despite these figures, in the last 12 months we have seen more and more employers recognising the importance, post DRA, of helping employees to plan their retirement and as a result to decide when to retire. Our Planning Retirement workshops, run both in-house and at 45 locations around the UK, have seen an almost fifty per cent increase over the last year, as a result.”
