Welcome for later retirement age legislation, but warning that income is major barrier to those looking to retire

Maureen Kavanagh, the CEO of Active Retirement Ireland, has welcomed Cabinet approval for new legislation that would allow employees to continue working until 66, the age at which they become entitled to the State pension.

Speaking on RTÉ Radio 1’s Morning Ireland, Ms Kavanagh, chief of the national network of active retirement associations, said it was a move to bridge the gap that exists between mandatory compulsory retirement faced by many in the private sector, and the fact that the State pension commences at 66.

“However, what we would warn against is that there must always be an option. Mandatory or compulsory retirement ages, we don’t agree with them. People should be able to work until they can and for as long as they can, and that choice is really, really important,” she said.

[ Employees to be allowed work until State pension age of 66 under new law ]

“However, on the other side of it, we also acknowledge that there are many, many professions – hard labour work, caring professions – where people probably can’t even continue to work up to 66, so that needs to be taken into account as well. And over the years, what we have campaigned for first is to stop the pension age from rising beyond 66, but equally to look at how our older people are treated within the employment sector. Are there opportunities for older people to retrain as they reach their 50s and 60s?”

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Ms Kavanagh pointed out that at present people in some sectors had to retire when they reached the age of 65, and then had to either negotiate to stay on another year or go on social welfare until they reached 66 and could get the State pension.

Ms Kavanagh acknowledged there was “an enormous gap” between those on private pensions and those who would be reliant on the State pension. “It’s a major issue. And the Pension Reform Commission has been looking at different ways, pensions coming in that employees and employers will have to contribute to.”

Many people felt that they were contributing towards their pension by paying their PRSI, she said, but research had shown that income is the biggest barrier for people planning to retire.

The main thing that we want to say is that there is a huge value for the amount of people who do retire and retire when they can, and when they’re healthy

—  Maureen Kavanagh

Ms Kavanagh said that at present the pension was not at the promised level of 34 per cent of the average wage. “It is below that. So if the pension was raised, which is a promise that the Government has made and the pension reform as well, if it was raised to 34 per cent of the average wage, we would be looking at people coming into a higher pension.

“The main thing that we want to say is that there is a huge value for the amount of people who do retire and retire when they can, and when they’re healthy, because their contribution to society is immense as they volunteer, as they go into caring roles. So that needs to be valued as well.”

The new legislation will allow employees currently obliged to retire before they become entitled to the state pension, commonly at 65 in the private sector, to inform their employers in writing of their intention to stay on.

The general issue has contributed to an increasing number of age discrimination cases at the Workplace Relations Commission, with more than 500 in 2022, and aspects of the current legislation has been the subject of a number of challenges in the courts.

The Irish Congress of Trade Unions (Ictu), which has campaigned on the issue, welcomed a decision by the Cabinet on Tuesday to agree to proposals by Minister for Enterprise Simon Coveney.