Taoiseach: Pension age to remain at 66 but workers can't be forced to retire
Taoiseach Micheál Martin said the 'idea of retiring at 66 has to go'. Picture: Brian Lawless
The pension age will not go beyond 66 and companies will be banned from forcing retirement, the Government has said.
A comprehensive pensions strategy will be announced by Social Protection Minister Heather Humphreys in the coming weeks, but Taoiseach Micheál Martin has confirmed that the broad outline of the deal has been already been finalised by coalition leaders.
It includes moves to:
- Keep the pension age at 66;
- Ban contractual retirement ages;
- Give larger pensions to those who retire at 67.
The pension age had been due to rise to 67, something which was politically divisive and seen as a red-line issue for many Fianna Fáil TDs.
However, the Taoiseach has now confirmed it will not change from 66.
That is at odds with the report of the Pensions Commission last October, which recommended the retirement age be set at 66 and three months in 2028, 66 and six months in 2029, and 66 and nine months in 2030, before hitting 67 in 2031.
Mr Martin has indicated that he is open to minor increases in PRSI to cover this.
He added that there would be “flexibility” about when people can retire and claim the State pension, with the opportunity for those who retire later to be “incentivised” with higher rates.
Mr Martin said there is no justification for forcing people to retire at 66 and the Government legislation would ban this practice.
“This idea of retiring at 66 has to go. I think the market will dictate this, but equally we want to make sure there's no discrimination against people of that age because people are living longer, they're healthier, quality of life is improving.
“It depends on the professions as well, the kind of work you're doing. Not everybody, for example certain employments, can keep going to 70 because the work is just too difficult or too burdensome.”
Mr Martin said, however, that he does not believe this legislation can be put in place for people whose contracts are currently in place.
“We have to work on that more, but I don't think it can be retrospective. You can’t arbitrarily interfere with contracts that individuals enter into.
“It has to be worked on and the detail has to be fleshed out.”
Mr Martin said there can be no argument about the sustainability of the State pension into the future and that there are “a number of ways” of ensuring it remains viable.
The social insurance fund had a shortfall of €2.3bn in 2020 but this will be €21bn by 2070. By 2041, State pension expenditure alone will equate to the entire social insurance fund receipt.
“There's a broad range of proposals in the commission's report, which deal with sustainability. Suffice to say that we're very conscious of the sustainability issue. The measures that we're adopting will take that on board.”
The Government’s plans were given a cautious welcome by unions last night, though they warned that the devil will be in the detail.
Laura Bambrick, head of social policy and employment affairs at the Irish Congress of Trade Unions, said it had made the case to the Pensions Commission that it should be made illegal to force a worker to retire before they qualify for a State pension.
She also cited the public service retirement age of 70 as an example where people could opt to stay on a few extra years without any obligation.
“Allowing people to stay on indefinitely may create a couple of problems too,” she said.
“The contractual retirement age should be no younger than the pension age.”
Ms Bambrick said having no set retirement age would have particular implications for younger workers who would face uncertainty over their progression and career paths if their older colleagues could work on without a set retirement date.
She also said there may be health and safety concerns for people being facilitated to work indefinitely and it shouldn’t become a situation where people “work till they drop”.
