In last month’s newsletter, we explored the significant changes introduced by the Employment (Contractual Retirement Ages) Act 2025 and the increased obligations on employers seeking to enforce retirement ages below the State Pension Age.

While many organisations have reviewed retirement policies and contractual provisions, a new challenge arises:

How do employers practically manage requests from employees who wish to remain in employment beyond their contractual retirement age?

For many managers, the legal changes are only the beginning. Navigating these conversations fairly, consistently and sensitively is becoming a critical workforce management issue.

The New Reality for Employers

Increasingly, employers are encountering employees who:

• Wish to remain in full-time employment beyond retirement age.
• Seek an extension for a specific period.
• Want to transition into part-time or flexible arrangements.
• Are financially unable or unwilling to retire.
• Feel they continue to have valuable skills and experience to contribute.

The Risk of Inconsistent Decision-Making

One of the biggest risks facing employers is inconsistency.

For example:

• One employee is permitted to work until age 67.
• Another is required to retire at 65.
• No clear rationale exists for the different treatment.

Such situations can create perceptions of unfairness and increase the risk of workplace disputes.

Managers may understandably wish to accommodate valued employees on an individual basis, but ad hoc decision-making can quickly create difficulties.

A structured and consistent framework is becoming increasingly important.

Moving from Retirement Policy to Retirement Process

Many organisations have a retirement policy.

Far fewer have a clear retirement process.

A robust process should include:

Early Engagement

Retirement discussions should not begin weeks before an employee reaches retirement age.

Good practice suggests beginning conversations well in advance to allow both parties sufficient time to consider options and make informed decisions.

Individual Assessment

Employers should avoid making assumptions based solely on age.

Each request should be considered on its own merits and in the context of the organisation’s legitimate operational needs.

Documented Decisions

Where an employee seeks to remain beyond retirement age, employers should carefully document:

• The request made.
• Factors considered.
• Organisational requirements.
• Any alternatives explored.
• Reasons for the decision reached.

Good documentation can be invaluable if decisions are later challenged.

Could Flexible Retirement Be the Answer?

Many organisations are beginning to explore more flexible approaches.

Rather than a simple choice between continuing employment and retirement, options may include:

• Reduced working hours.
• Fixed-term extensions.
• Mentoring or knowledge-transfer roles.
• Project-based assignments.
• Consultancy arrangements following retirement.

Such approaches can benefit both employers and employees.

The organisation retains valuable expertise, while the employee gains greater flexibility as they transition towards retirement.