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Australia is looking at raising the retirement age to 70! Here's what you need to know about retirement age in South Africa

by , 30 June 2014
The Irish Independent reports that Australian treasurer Joe Hockey wants to raise the nation's retirement age to 70, the highest in the world, to prevent an ageing population from draining state coffers.

According to the report, Australia is leading the charge for a group of top economies from Japan to Germany that are pushing up retirement age to deal with the growing number of pensioners and a declining pool of taxpayers.

This move has certainly put sharp focus on the issue of retirement age and one thing is certain: The world will be watching this.

While you await the outcome in Australia and to see if South African law makers will follow suit, read on to find the key points about retirement age in South Africa so you can avoid labour disputes.

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To avoid automatically unfair dismissal and unfair discrimination claims, make sure you know these points about your employee's retirement age

Point #1: There's no legal age for retirement, but it's generally accepted that 60 or 65 is an acceptable or 'normal' age to retire.

Point #2: If you and your employees have agreed on a certain retirement, for example, 65, you can't terminate employment at age 63 on the grounds that 63 is the 'normal' retirement age.

Be warned: If you force your employee to retire before the agreed retirement date, that's an automatically unfair dismissal. This is also considered to be unfair discrimination.

Also keep in mind that imposing a retirement age after your employee has already reached that age is illegal.

Point #3: If there's no agreed retirement age in your employees' employment contracts, you must incorporate the rules of a retirement fund into your employment contracts.

Point #4: If you have no agreed retirement age in place and want your ageing employee to retire, put a retirement age in place immediately, say the experts behind the Labour Law for Managers Loose Leaf Service.

They say you can contact other employers in your industry, or a body regulating your industry like a bargaining council to establish what the 'normal' retirement age is for employees in the same capacity as your employee in question.

After this, tell your employees you're going to introduce a 'normal' retirement age and ask for their views.

When you reach an agreement, clearly outline the agreed retirement age in your retirement policy and make sure employees sign the policy so there will be no confusion when it comes to retirement age.

Knowing these key points about retirement age will help ensure you avoid automatically unfair dismissal and unfair discrimination claims.

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