11 March 2009 – The Department for Work and Pension’s (DWP) further consultation in the area of flexible retirement closed yesterday. Leading international law firm Mayer Brown submitted a detailed response, in which they argued that the two proposed exemptions to the age regulations would not achieve the government’s stated intention of encouraging the employment of older workers.

The first exemption would allow the stopping of accrual during the flexible retirement arrangement. The second is more narrowly drawn, allowing the stopping of death in service benefits during the flexible retirement arrangement.

Mayer Brown’s head of pensions Anna Rogers commented
: “It's good to have some more clarity I suppose, but why are the DWP interpreting flexible retirement so  narrowly? Our clients want to let employees draw pensions while carrying on in the same job, but the DWP will only help when the employee has a reduced role. This latest consultation is unlikely to achieve either the certainty employers want, or the government's stated intention of encouraging flexible retirement options. If the DWP don't do more than this, trustees and employers will still be left to argue objective justification on a case by case basis.

“Also we have concerns about the status of any proposed guidance - it may help to establish a consensus but employers should take care how far they rely on because the courts may not be willing or able to take it into account.”

For further information:

Charlotte Ward
PR Manager, London
+44 20 3130 8547