14th Feb 2019
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Why mandatory retirement ages should be a thing of the past

Why mandatory retirement ages should be a thing of the past

Alysia Blackham, University of Melbourne

Mandatory retirement ages are – rightly – mostly a thing of the past in Australia. But they still linger both formally and informally in some sectors and roles. This is of major concern for a country with an ageing population, such as Australia.

Compulsory retirement ages have been progressively prohibited in Australia since the 1990s. There are good reasons for this: reliance on irrational stereotypes about older workers can prevent businesses from finding the best person for the job. Allowing workers to choose when they retire can improve staff retention, increase workforce morale, and help employers retain vital skills and experience.

At a national level, prohibiting mandatory retirement can help relieve the burden of an ageing workforce on pension systems. It also promotes labour market supply and removes barriers to older people participating in society.


Read more: Keeping mature-age workers on the job


Abolishing mandatory retirement can reduce welfare expenditure and increase self-reliance. Importantly, it recognises the inherent worth and dignity of workers of all ages, and sends a strong national message about the importance of ending age discrimination.

Where mandatory retirement remains

Federal Australian judges must retire at the age of 70, as outlined in section 72 of the Australian Constitution. While section 72 does not generally apply to state or territory courts, all states and territories also impose a retirement age for their judges. These range between ages 65 and 72.

The Australian Defence Force has also maintained a mandatory retirement age of 60 for personnel and 65 for reservists, though this can be extended on a case-by-case basis.

In Australia, federal court judges have a mandatory retirement age of 70. Shutterstock

Overseas, some countries still allow mandatory retirement. The UK, for example, allows employers to justify a mandatory retirement age for their workforce. The UK Supreme Court has identified two broad categories of legitimate justification: intergenerational fairness and dignity.

Retirement provisions have been retained by some UK universities, including Oxford and Cambridge. These organisations have claimed that retirement ages are justified by very low turnover, which may limit progression for other staff. They also cite the need to increase staff diversity, refresh the workforce, and facilitate succession planning.


Read more: How we could make the retirement system more sustainable


My research on how Australian universities are operating without mandatory retirement shows that there has been an increase in the number of academics working longer. The percentage of total academic staff at Australian universities aged over 64 increased from 0.96 per cent in 1997 to 4.66 per cent in 2012.

Extending academics’ working lives may be affecting the employment prospects of younger academics, particularly in relation to the availability of permanent academic posts at junior levels. Overall, though, there have been few negative impacts from the removal of mandatory retirement ages in universities.

I found Australian universities value the experience and skills of their older academic workforce, and explicitly reject any link between age and declining performance.

Judicial retirement ages

Even for the judiciary, mandatory retirement ages are outdated and inefficient. When they were introduced at the federal level in 1977, retirement ages were intended to “contemporise” the courts by introducing new people and ideas. They were designed to prevent declining performance on the bench and provide opportunities for younger judges.

But the workforce and our attitudes to older workers have changed since 1977. My research found that mandatory retirement ages for judges are inconsistent with modern workplace practices and are contrary to the desire for age equality. There is no evidence that older judges are “out of touch”, and age is a bad predictor of individual capacity.

Instead, judicial retirement ages may deprive the courts of expertise and experience. Retirement ages also appear to be contrary to the wishes of judges themselves. Justice Graham Bell, who retired from the Family Court of Australia on 20 February 2015, was quoted as saying:

These days 70 is equal to 60 or 55. … Judges should be able to go on till 80 provided they pass a medical inspection. After all, the pension makes judges pretty expensive creatures in retirement. They are sent out to pasture too early.

What’s more, judicial retirement ages are largely unnecessary in practice. Judges are entitled to generous pensions and often retire of their own accord. New judges will still be given opportunities even if we remove mandatory retirement ages.

Informal retirement pressures

Where mandatory retirement has been officially removed, there can still be pressure to retire at a certain age. My research found that some Australian universities may be using potentially discriminatory methods (such as redundancy) to manage an ageing workforce.

A significant proportion of older Australian workers report experiencing age discrimination. In 2014, over a quarter (27 per cent) of Australians aged 50 years and over reported experiencing age discrimination in employment in the last two years.

Given these findings, in 2016 the Australian Human Rights Commission (AHRC) conducted a national inquiry into discrimination against older workers. It recommended a suite of changes including discrimination law reforms and appointing a cabinet minister for longevity.


Read more: Age discrimination in the workplace happening to people as young as 45: study


Previous studies have suggested that declining numbers of older men in the workforce are mostly due to employer constraints, not constraints on the part of older workers. This suggests the need for a shift in employers’ attitudes towards older workers, to encourage continued participation.

Why mandatory retirement ages are inefficient

With an ageing population, Australia cannot afford to lose skilled workers prematurely. In 2013, the Productivity Commission estimated that overall labour supply per capita will fall by nearly 5 per cent by 2059–60 due to demographic ageing. The commission concluded that:

A period of truly diminished outcomes is likely to be at hand, unless luck or appropriate policy initiatives intervene.

One of the key policy measures available to address this looming issue is to increase workforce participation rates for older workers. Eliminating the last vestiges of mandatory retirement is an obvious first step.The Conversation

Alysia Blackham, Senior Lecturer in Law and ARC Discovery Early Career Research Fellow, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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    COMMENTS

    To make a comment, please register or login

    14th Feb 2019
    9:59am
    Certain professions where there is no retirement age, should have the OAP eligibility criteria increased and employer super contributions reduced. Public sector for example where they get paid bloated salaries far beyond their competence and productivity
    4b2
    14th Feb 2019
    10:53am
    I think some positions where skills are critical such as Surgeons, specialists, Federal ad Stae judges should have a limited age for practicing. Maybe they can have an advisory or mentoring role after a certian age. Other positions should remain non mandatory but also be subject to performance and skill performanc.
    RB
    14th Feb 2019
    11:29am
    My husband is a VERY fit 72 and still working harder than anyone I know, as self employed in the building industry. For the last several years he has not been able to be insured ‘because of his age’. This is so wrong ....and aged biased! rb
    Grime
    14th Feb 2019
    1:06pm
    everyone is talking about people working longer. what about the people who need to retire younger than the pensionable age? i read some time ago that the average age of retirement in Australia is 61. some of us will be fit into our ninties, a lot if my friends died in their fifties and sixties.
    Grime
    14th Feb 2019
    1:07pm
    everyone is talking about people working longer. what about the people who need to retire younger than the pensionable age? i read some time ago that the average age of retirement in Australia is 61. some of us will be fit into our ninties, a lot if my friends died in their fifties and sixties.
    Sundays
    14th Feb 2019
    1:26pm
    If you are able to keep working do so by all means. However, proposing those whose bodies have worn out through physical work to wait until age 70 to receive the OAP is cruel. Also, why is it that when some politicians leave parliament they are entitled to access their super regardless of age.
    musicveg
    14th Feb 2019
    2:10pm
    I think it depends on each circumstance, of course they need to be checked as the years progress to make sure they are still competent in their job, but I think far too many work longer than they should, if you can afford to retire early then they should to free up work for younger people. Mandatory in some professions should stay, especially if it involves the safety of others.
    Chris B T
    14th Feb 2019
    2:57pm
    Setting of any age requirements for being to Old, means nothing when the employer regards you are to Old At late 40's to 50.
    So setting a Predetermined Retirement Age that is Generalized for All, unenforceable rights for the victims of ageism. So who's Policing This Policy.(CHANGE Your Birth date) I must have made a mistake sorry. Let The Non Policy Police say you are to Old.
    Until you experience it, it is worse than you think.
    casey
    14th Feb 2019
    3:09pm
    If they lowered the retirement age to 60 with no means test it would free up a lot of jobs for young people. Cheaper to pay the age pension than to pay unemployment benefits to a young couple with 3 kids.
    cupoftea
    14th Feb 2019
    3:31pm
    Casey a very good point but this government believes in only giving money to people who don't need it ask the banks who they will be given $17 billion tax relieve as soon as they can
    cupoftea
    14th Feb 2019
    3:31pm
    Casey a very good point but this government believes in only giving money to people who don't need it ask the banks who they will be given $17 billion tax relieve as soon as they can
    OlderandWiser
    14th Feb 2019
    4:54pm
    And Labor believes in only giving to people who DON'T need it. Just check out the franking credit policy. $54 billion a year to continue allowing tax reductions for high income earners and people with more than $1.6 million in super (and the more they have, the more credits they enjoy), but claiming to save $6 billion by slashing the incomes of poor self-funded retirees, many of who will be forced onto the OAP as a result.

    Of course neither party wants people to retire at 60 or even 65 because they might go on the OAP, or at very least stop paying tax, but it's okay to cripple a worker by forcing him/her to continue heavy physical labour long after their body has worn out, while paying unemployment benefits to the fit young folk who could have taken the place of the aging worker.

    Ultimately, surely the promise of an at least moderately comfortable retirement BEFORE the body gives out completely would surely be an incentive to increase productivity and saving and would benefit society far more than worrying about stopping people from retiring. Most who really want to can find a way to continue working, even if it means changed hours and perhaps changes to their job description.

    Bottom line is that politicians don't live in the real world and have no clue how to deal with reality.
    OlderandWiser
    14th Feb 2019
    4:54pm
    And Labor believes in only giving to people who DON'T need it. Just check out the franking credit policy. $54 billion a year to continue allowing tax reductions for high income earners and people with more than $1.6 million in super (and the more they have, the more credits they enjoy), but claiming to save $6 billion by slashing the incomes of poor self-funded retirees, many of who will be forced onto the OAP as a result.

    Of course neither party wants people to retire at 60 or even 65 because they might go on the OAP, or at very least stop paying tax, but it's okay to cripple a worker by forcing him/her to continue heavy physical labour long after their body has worn out, while paying unemployment benefits to the fit young folk who could have taken the place of the aging worker.

    Ultimately, surely the promise of an at least moderately comfortable retirement BEFORE the body gives out completely would surely be an incentive to increase productivity and saving and would benefit society far more than worrying about stopping people from retiring. Most who really want to can find a way to continue working, even if it means changed hours and perhaps changes to their job description.

    Bottom line is that politicians don't live in the real world and have no clue how to deal with reality.
    cupoftea
    14th Feb 2019
    3:23pm
    In Ireland last year the Irish government turned round and said if you where sat on a chair during your working life you will retire at 70 if you done manual work you will retire at 67
    Chip
    14th Feb 2019
    5:45pm
    Sounds good to me.
    cupoftea
    14th Feb 2019
    3:23pm
    In Ireland last year the Irish government turned round and said if you where sat on a chair during your working life you will retire at 70 if you done manual work you will retire at 67
    Cheezil61
    14th Feb 2019
    4:53pm
    Pretty sure there is more of an argument here for the opposite (younger retirement rather than flogging older Aussie workers to death).. Makes me hate all poloticians even more when they are so out of touch with real working people!
    OlderandWiser
    14th Feb 2019
    4:55pm
    Couldn't agree more Cheezil61
    OlderandWiser
    14th Feb 2019
    4:55pm
    Couldn't agree more Cheezil61
    Chip
    14th Feb 2019
    5:44pm
    Another profession that has a mandatory retirement age is the Qld Police Service. All Police apart from the Commissioner have to retire at 60. There is a lot of experience that leaves the Service that could provide useful information in regards criminal activities and some professions that a Officer could carry on doing for a number of years past 60. I could not envisage an Officer being on the beat past 60 but there are areas that an older Officer could work in and allow the younger Officers to get from behind a desk and make arrests, etc.
    Charlie
    14th Feb 2019
    5:50pm
    These professions are not representative of the majority of the population. They are situations in which maximum performance is critical.

    The debate, is more about the age at which you should get the pension.

    From my experience, much of old age is terribly wasted.
    nan
    14th Feb 2019
    6:08pm
    I know three brothers, all doctors,who are all well in their 70's and still running their own . practice. I think this is a rather dangerous. Who is checking on their competency. They've been working in the same surgery for nearly 50 years.
    GeorgeM
    14th Feb 2019
    7:36pm
    Of course, there should not be mandatory retirement ages, however some professions (including judges) can cause harm to others through bad decisions or bad performance generally. Hence there must be compulsory medical examinations by independent doctors (not their own GP) to allow them to continue after a certain age which should depend on each profession.

    On the other hand, the more urgent question is the Broken Pensions system. All Special Pensions, such as for politicians, judges, etc, both past & present (with No Grandfathering) must be scrapped immediately. The whole Old Age Pension system should also be scrapped and replaced with an Universal Age Pension kicking in at Age 65, and Residency of 15 years, with NO other tests. Then all can continue working as long as they wish & are able to, with no penalties based on what you earn or what you save. That would massively benefit the economy as well as save huge Centrelink costs.
    Besides all advanced countries, even NZ has a similar universal pension system - so what is wrong with our stupid, self-serving politicians? Time they were all kicked out by the Retirees acting in unison, by putting them (current MP of any of the 3 Major parties) last in preferences. Make them wake up to Retirees power and needs!
    casey
    14th Feb 2019
    7:49pm
    Yes, totally agree.
    nan
    14th Feb 2019
    8:17pm
    We all have to pass a test at 75 to see if we are competent to keep driving. That should be brought in (say 65 yrs) for all people in jobs that could affect over peoples lives.
    nan
    14th Feb 2019
    8:17pm
    We all have to pass a test at 75 to see if we are competent to keep driving. That should be brought in (say 65 yrs) for all people in jobs that could affect over peoples lives.
    Anonymous
    14th Feb 2019
    9:19pm
    No - 67 that’s the OAP age threshold labor introduced
    nan
    15th Feb 2019
    10:39am
    In QLD at 75, you have to have your eyes tested and then see you GP to obtain a medical certificate to go with your drivers licence.
    Eddy
    14th Feb 2019
    10:24pm
    This report has the hallmarks of the author predetermining the final outcome and then writing a report to justify it. There are very good reasons to have mandatory retirement ages for some occupations, such as airline pilots, soldiering, train drivers etc. No surprise that as one ages some decline occurs in cognition skills as well as physical abilities. The author mention 'research' but then introduces no evidence based on this research. Not that I disagree with the hypothesis about mandatory retirement it is the way it is presented that irks me.


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