Retirement generally means leaving paid work with no intention of returning to work in the future. This section explains what you need to know if one of your staff is considering retirement or approaching retirement age.
Average retirement age
Most people retire at 55 years or over. According to the Australian Bureau of Statistics, the average age Australians intend to retire is aged 65.7 for men and 64.5 for women.
Compulsory retirement at 65 was made unlawful in South Australia in 1993. If workers feel like they have been forced to retire they may lodge an age discrimination complaint with the Equal Opportunity Commission.
Most staff can't be forced to retire because of age, with exception to:
- judges and magistrates must retire at 70
- Australian Defence Force personnel must retire at 65.
The average retirement age is increasing as we have an ageing population. More workers will move into retirement age and fewer will enter the labour market. As a result, there will be a shortage of workers.
Governments and many employers are already trying to encourage workers to stay on longer by offering assistance to older staff and options like phased retirement.
Why do people retire?
People retire for many different reasons.
- Health issues – They may no longer want or be able to work because of injury or ill health.
- Nature of the work – Staff in physically demanding jobs are more likely to retire earlier than others.
- Personal demands – They may have responsibilities outside of work, such as caring for family.
- Leisure – They may want more time to enjoy leisure activities.
- Community interests – They may want more time for volunteer work, hobbies, sport, travel and family.
- Retrenchment or dismissal – They may be unable to find other work.
- Access to a Pension – Being able to access a pension or superannuation.
You can retain your staff beyond retirement age by offering phased retirement or flexible working conditions which can benefit both your business and the staff.
Employers forcing staff to retire
Some staff may feel forced to retire because of the attitude and behaviour of their employers. Behaviour could include:
- threatening to retrench or dismiss older staff because of their age
- training younger staff and not older staff
- giving older staff demeaning, fewer or low status tasks
- using medical tests to force staff to retire
- using fixed term contracts (it is generally unlawful to employ older staff on fixed term contracts when younger staff are on long term or permanent contracts)
- withdrawing benefits or stopping accrual of benefits based on years of service, for example increments or bonuses.
Compulsory retirement because of age is generally unlawful in Australia, under both state and federal laws.
If workers feel like they have been forced to retire they may lodge an age discrimination complaint with the Equal Opportunity Commission - see Making a Complaint.