State may force employers to drop mandatory retirement ages

Employers may be forced to abolish mandatory retirement ages for their workers under a road map for pensions reform published yesterday by the Government.

Many workers have a set retirement age – often 65 – written into their employment contracts. But, since 2014, they have not been able to access the State pension until they turn 66, which has forced them to sign on for jobseekers’ benefit for the intervening year.

Patricia King, general secretary of the Irish Congress of Trades Unions, said the decision to raise the age at which people can get the State pension to 67 in 2021 and 68 in 2028 posed "major income challenges for workers whose employment may not extend to this date and who will be solely dependent on the State pension for income in retirement".

‘Greater flexibility to work’

The pension reform plan, outlined by the Government, says it is “determined” the measures will “result in greater flexibility to work beyond what may be considered the traditional retirement age of 65”.

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It says it will keep under review the actual practice of employers in this area.

“Should it appear that these provisions are not resulting in improved flexibility for workers, by the end of 2018 the Government will consider the merits of restricting the capacity to use mandatory retirement provisions relative to the prevailing State pension age,” the report says.

Increased flexibility is one of a number of reform measures planned. Others include the introduction of auto-enrolment for workers by 2022 and changes in the way eligibility for the State contributory pension is calculated, as well as linking future pension increases to the rate of inflation or pay increases.