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Business chiefs pan retirement age plan

Northern Ireland’s business voice today called on the Government to scrap proposals to abolish the retirement age of 65.

The Confederation of British Industry (CBI) said compulsory retention of staff beyond the age of 65 could exacerbate unemployment in an already precarious ecomomic climate.

Nigel Smyth, CBI’s regional director, also said the removal of the fixed retirement age by next October would create uncertainty for businesses.

Speaking to the Belfast Telegraph, Mr Smyth said his organisation was “disappointed” the government was going ahead with plans to axe the current scheme.

“There are two main benefits of having an established retirement age,” he said.

“It helps staff think about when it’s right to retire and it helps employers plan more confidently for the future.

“Without a workable alternative in place it would be wrong to abolish current arrangements.”

He added: “There’s also a risk it would negatively affect young people’s employment.”

Currently, an employer can force an employee to retire at the age of 65 without paying any financial compensation.

The only obligation on an employer is to hold a meeting with the member of staff to discuss plans at least six months before their 65th birthday.

At the end of that meeting it is entirely at the discretion of the employer whether or not to terminate employment.

But Mr Smyth said CBI research showed that 81% of employees who requested to stay in work were accepted by bosses.

“The existing system already allows for a certain flexibility as our figures show,” he said.

“In certain jobs, often the physically demanding ones, working beyond 65 isn’t possible.

“Also, companies with small numbers of staff have particular problems adapting jobs for older people.”

Northern Ireland’s largest trade union described the plans as a “double-edged sword”.

But NIPSA spokesman Brian Campfield also said “on balance” lifting the default age was good news.

“If people are fit, capable, able and have enough energy there is no reason why they shouldn’t be able to work for longer,”said Mr Campbell.

“The Government is, however, going to have to take measures to tackle unemployment if that’s going to be the case.

“It needs to invest in the economy and public services to ensure that abolishing the fixed retirement age doesn’t impact upon school and college leavers seeking work.”

He added: “Unemployment – particularly youth unemployment – is growing because of the recession and the cuts in public expenditure and there are clear concerns that could worsen.”

The move to phase out the so-called default retirement age of 65 by October 2011 signals a bid by ministers to encourage people to work for longer.

Currently employers can make staff retire at 65 regardless of their circumstances but ministers signalled that this was set to change as people were living longer, healthier lives.

Other steps include reviewing when the state pension age should increase to 66 and re-establishing the link between earnings and the basic state pension.