Call for abolition of mandatory retirement age

Oireachtas recommends allowing people to keep working and contributing to pensions

State pensions cost about €7 billion a year to finance and will rise alongside an ageing population – the proportion of those aged 65 and over rose by 14.5 per cent between 2006 and 2011.

State pensions cost about €7 billion a year to finance and will rise alongside an ageing population – the proportion of those aged 65 and over rose by 14.5 per cent between 2006 and 2011.

 

The mandatory retirement age should be scrapped in Ireland, allowing people to continue working and contributing to their pension pots, an Oireachtas committee report has recommended.

The Joint Committee on Social Protection, reviewing the current system of the State contributory pension scheme, issued its findings on Friday.

It said measures should be taken to reduce the gender gap and to compensate women who lost out on payments due to a historical requirement to retire from public service jobs after marriage.

The report comes amid mounting calls for pension reform. Last Sunday, the Citizen’s Assembly voted in favour of removing a mandatory retirement age and said all workers should be required to join a pension scheme.

The Joint Committee began considering the issue late last year and narrowed the scope of its review to the contributory scheme.

It consulted several interest groups including Age Action, the National Women’s Council of Ireland, Congress and Active Retirement Ireland.

The contributory pension is paid to people aged 66 or over. It is not means-tested and the maximum weekly rate is €238.30.Those without adequate contributions, and who satisfy a means test, can receive the non-contributory pension.

Ageing population

State pensions cost about €7 billion a year to finance and will rise alongside an ageing population – the proportion of those aged 65 and over rose by 14.5 per cent between 2006 and 2011.

The committee said proposals should be considered for a universal pension payment to replace both the contributory and non-contributory models, and be subject to gender- and equality-proofing.

Many of the recommendations are gender-related. The report said changes introduced in 2012 increasing the number of bands and doubling the minimum number of required contributions are “demonstrably inequitable”, have a disproportionately negative impact on women and should be immediately suspended.

It called for the possible introduction of “caring credits” to ensure carers do not lose out on entitlements, and recommended compensation for women with inadequate contribution records due to historic inequities such as the marriage bar, which brought forced retirement from the public sector.

An action plan should be considered on closing the pension gender gap (currently at about 41 per cent), and the concept of mandatory retirement age, an issue more applicable to the private sector, should be abolished.

“No employee should be contractually obliged to retire based on age if they are willing and able to remain at work,” it said.