Ceasing to provide benefits after the age of 65
The abolition of the default retirement age has seen a substantial increase in the number of people remaining in employment over the age of 65. One issue which this has raised with a number of employers is the cost of continuing to provide some insured benefits to older people.
Two of the main areas of concern have been the provision of private medical insurance and the provision of life assurance, as the premiums required by insurers to continue to provide these benefits for an older workforce can be prohibitive.
Withdrawing the benefits may amount to unlawful age discrimination, and it would be for the employer to show that withdrawing the benefit was a proportionate means of achieving a legitimate aim. This can be quite an onerous burden.
This problem was recognised by the Government, and there is a provision in the Equality Act 2010 (paragraph 14 of schedule 9) which provides that it is not unlawful discrimination to withdraw benefits which are insured through third parties when an employee attains the age of 65.
However, there are problems with the drafting of this provision. First, it only applies to benefits insured through a third party; so an employer who self insures would not be protected (unless they are in the business of providing insurance). Some benefits are operated through a trust, and it is unclear whether these would benefit from the exemption or not.
Second, and more importantly, the wording of the legislation is such that the exemption only applies if the benefit is withdrawn when the employee “attains the age of 65″. The exception therefore only seems to be available to employers who stop providing insured benefits to employees as soon as they reach the age of 65. Employers who choose to continue to provide the benefits for longer, for example, until the employee reaches the age of 70, would, on the face of it, fall outside the exception. Those employers might, instead, have to objectively justify their policy so as to show that this is not unlawful age discrimination.
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