Proposal to raise retirement age welcomed by employer group

Proposals to scrap the retirement age of 65 will give “security” to both em ployers and workers, business group Ibec has said.

A report published by the Pensions Commission on Thursday evening recommended employers not be allowed to force people to retire before the State pension age.

The Government should legislate for an alignment in retirement ages in employment contracts with the State pension age, it recommended.

This would allow, but not compel, a worker to continue working until they hit a State pension age that will rise slowly over the next two decades.

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Maeve McElwee, director of employee relations at Ibec, said the employers group welcomed the proposal.

“This change and review of the legislation around retirement age, contractual, and State pension age, is something we have been looking at for a considerable period of time,” she said.

“For lots of employers, the contractual retirement age at 65 has proven very challenging over the last number of years.

“We are seeing people living longer, much healthier, and much more engaged and willing to stay in the workforce.”

Ms McElwee said a contractual retirement age requires that people are treated consistently.

“So, it has become increasingly difficult for employers to assist employees who wish to stay beyond their contractual retirement age, with objective and legitimate criteria,” she told RTÉ’s This Week.

Ibec has been lobbying the government for a number of years to look at realigning contractual retirement ages with the State pension age.

With proposals to raise the State pension age over the coming years to plug a financial hole in the Social Insurance Fund, many workers are fearful that they will be forced to retire at 65 and then wait an extended period a State pension.

Around a third of all workers rely solely on the State pension for their retirement income. At present, those who have to retire at 65 and do not qualify for the State pension until they are 66 have to sign on for unemployment benefits.

The Pensions Commission recommendation would “allow both security for employers of knowing that there is a retirement age, but also for employees to be able to stay on longer, should they wish to choose so,” said Ms McElwee.