Survey shows manufacturers want retirement age to be set at 65 as employment of older workers increases

Britain's manufacturers call for the Government to set a standard retirement age of 65 

Britain’s manufacturers want the Government to set a standard retirement age of 65 when it introduces EU legislation on age discrimination in October 2006, according to a major survey of companies published today by EEF, the manufacturers’ organisation, and Aon Consulting, a leading pensions, benefits and HR consulting firm.

This call comes ahead of what is probably the final meeting this week of the Government’s Retirement Age Taskforce which was set up to recommend retirement age policies when age discrimination legislation is introduced. Two thirds of over 525 companies of all sizes that responded to this survey wanted a standard retirement age of 65 to be set, with only a quarter of them wanting this age set at 70 and even fewer favouring there being no standard retirement age.

In addition, the survey showed that, contrary to popular belief, many manufacturing companies are now employing some older workers. One in 4 of those who responded to this survey already have some full-time employees over their company’s normal retirement age, which in the vast majority of cases was 65, and nearly a third of them had some part-time employees over 65.

Whilst EEF supports the principle of age discrimination legislation, these figures back our view that the Government should continue to encourage a voluntary approach to the employment of older workers rather than introduce this legislation in a way that would create additional costs and administrative burdens for employers.

EEF Deputy Director of Employment Policy, David Yeandle, said:

"These results confirm that there is strong support amongst manufacturing companies for having a standard retirement age of 65 when age discrimination legislation is introduced. However, the number of manufacturing companies employing full-time or part-time employees beyond their normal retirement age suggests that employers and their older employees are agreeing voluntary arrangements which are felt to be mutually beneficial."

"The Government is already pursuing a positive approach to the culture change that is needed to encourage the employment of older employees though its Age Positive programme. This approach is the right way forward and is likely to receive far greater support from employers than introducing age discrimination legislation in a way that creates complex and expensive problems for employers."

The survey also showed that almost 90% of manufacturing companies wanted the state pension age to remain at 65 after 2020.

Commenting on this finding, Paul McGlone, Principal and Actuary, Aon Consulting, said:

"These figures show clearly that, while there may be a developing consensus among pension experts that the state pension age should rise, this view is not accepted in the wider community. Before this government or any government can increase the state pension age a significant amount of persuasion still needs to be done."

Notes for editors

1. The survey of 528 companies was carried out in September 2004. It is the latest in a series of EEF/Aon Consulting Pensions Surveys that has been undertaken since 1998 on the views of EEF members on various pensions issues. The research examines the opinions of EEF members on a number of key pensions issues including employer/employee compulsion and retirement age.

2. The EU Directive on Age Discrimination must be implemented into UK legislation by 1 October 2006

3. EEF, the manufacturers' organisation, has a membership of over 6,000 manufacturing, engineering and technology-based businesses and represents the interests of manufacturing at all levels of government. Comprising 11 regional Associations, the Engineering Construction Industries Association (ECIA) and UK Steel, EEF is one of the UK's leading providers of business services in employment relations and employment law, health, safety and environment, manufacturing performance, and education and skills.

4. Aon Consulting is a leading human capital consultancy, helping organisations of every size to attract and keep the employees they need. We advise on all aspects of employment, including health-related insurance and risk; employee compensation and pensions; human resource strategy planning; job design and change management; and staff assessment and legal issues. Aon Consulting is a division of Aon, the UK’s largest insurance broker and provider of risk management services, a major force in reinsurance and the UK human capital consulting market. Aon Consulting Limited is authorised and regulated by the Financial Services Authority.

5. This press release may contain certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, pension funding, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual cost of resolution of contingent liabilities and other loss contingencies, the ultimate impact of the business transformation plan, and the timing and resolution of related insurance and reinsurance issues relating to the events of September 11, 2001.

6. Further information concerning Aon Consulting and its business, including factors that potentially could materially affect the Company's financial results, are contained in the Company's filings with the Securities and Exchange Commission.

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