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What Is Compulsory Retirement?

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  • Written By: Felicia Dye
  • Edited By: C. Wilborn
  • Last Modified Date: 25 July 2014
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For some people, retirement is not a matter of choice. Compulsory retirement, also referred to as mandatory retirement, refers to instances where people are forced to retire. The point at which this happens is usually determined by the age of the worker.

Compulsory retirement generally refers to a policy that requires people to leave the workplace at a certain age. This issue has generated a great deal of debate in some countries. In the United States, for example, compulsory retirement at the age of 65 was practiced during the 20th century. The federal government eventually deemed it illegal for companies to force a person to retire due to age.

In some countries, the arguments for and against compulsory retirement has continued into the 21st century. As late as 2009, the United Kingdom had a policy that allowed employers to force employees to retire if they are age 65 or older. In Canada, some provinces banned the practice, while in others it was still permissible.

One of the major issues surrounding this policy is whether or not it constitutes age discrimination. Many argue that compulsory retirement is discrimination when age is the sole reason for requiring a person to leave his employment. Concerns have also been raised about the circumstances that can result from such a situation. In many instances, for example, it has been argued that some people have inadequate finances to retire at that age.

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There are several reasons that are used to support mandatory retirement. Controlling costs is one argument that is commonly put forth by employers. During a downturn, many companies have a policy of laying off or firing those employees who have the least tenure with the company. Compulsory retirement, however, can be used to allow a company to relieve themselves of the financial burden of those who are the oldest. This can often lead to substantial reduction in costs, since many of these people may have been with a company for an extended period and may, therefore, have sizable salaries and benefits packages.

It is also argued that mandatory retirement can boost the morale of younger employees. These individuals may be encouraged to stay with a company and to work harder if they know that there is the possibility of advancement to high ranking positions. When people are allowed to retire at will, it is argued that younger employees may become unmotivated by what they view as limited advancement opportunities.

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