Taoiseach promises comprehensive pensions strategy soon

During his recent visit to Japan, the Taoiseach indicated that, based on recommendations contained a 2021 Commission on Pensions report, legislation was being considered to provide that the State pension age will not go beyond 66 and that will allow employees to "build up" a higher payment if they continue working beyond this age. He is also reported to have said that the legislation will preclude employers from forcing retirement before state pension age.

In the absence of more detail on the Government plan, at this stage, Ibec would welcome the indication of greater proposed flexibility in accessing the state pension but it is critical that employers’ ability to fix mandatory retirement ages in contracts should be retained. The abolition of the mandatory retirement ages would have adverse effect on the ability of business to succession plan affecting talent acquisition and the retention of employees potentially frustrating motivation and dynamism in the workplace. Any such move would necessitate robust performance management policies which encroach upon the dignity of employees and may also affect an employer’s ability to commit to the funding of Occupational Pension Schemes over and above legal obligations.

Ibec has proposed that a Default Retirement Age (DRA) at the level of the state pension age should be explored, with employers able to set any retirement age at DRA or above but would have to objectively justify an age lower than DRA.

We will keep members up-to-date with developments in this area as more information becomes available.