25th March 2025
New legislation allows workers whose contract has a retirement age of 65 or under to work to State Pension Age of 66, if they so wish
The Minister for Enterprise, Tourism and Employment, Peter Burke, and the Minister of State for Small Business and Retail, Alan Dillon, have published the Employment (Contractual Retirement Ages) Bill 2025.
The Bill, once enacted, will deliver a new employment right. It will allow, but in no way compel, an employee to stay in employment until the State Pension Age (66).
The Bill delivers a statutory provision which sets out that that an employer may not enforce a contractual retirement age which is below the State Pension Age if the employee does not consent to retire. The Bill implements a key commitment included in the Government’s response to the Pensions Commission Recommendations and Implementation Plan.
Following Tuesday’s Cabinet meeting, Minister Burke said:
“This Bill will effectively create a new employment right specifically for employees who are subject to a retirement age in their employment contract which is set below the State Pension Age of 66. One of the main objectives of the Bill is to bridge the income gap experienced by a person who is required to retire at an age which is lower than the age at which they can access the State Pension.
The publication of this Bill, together with the wider package of pension reforms being rolled out by Government, is a significant step in improving the predictability of retirement income for employees and helping to protect workers when they are approaching retirement. Workers may still retire at 65 as per their contract if they so wish, but there are a cohort of people who are happy to continue to work for an extra year and this change in employment law will allow for this.”
Minister Dillon said:
“I am very pleased with the publication of this Bill which will implement a recommendation from the Pensions Commission and a key Government commitment relating to contractual retirement ages.
The legislation reaffirms our long-standing policy to encourage and support longer and fuller working lives, where older people are facilitated in continuing in employment, if they wish to, until the age at which they can first access the State Pension.”
ENDS
Notes to Editors:
The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund. The Commission’s Report was published on 7 October 2021. It is a comprehensive and authoritative report based on various analyses of population, labour force and expenditure projections; an examination of international approaches; and responses to an extensive consultation process.
In September 2022, in response to the Pensions Commission Recommendations and Implementation Plan, the Government committed to a range of pension reforms which will ensure the pensions system is sustainable in the face of demographic change and that people relying on the State Pension have adequate and predictable income in retirement. The majority of the commitments relate to significant reform of the State Pension System and are being led by the Department of Social Protection.
One key commitment relates the introduction of measures that allow, but do not compel, an employee to stay in employment until the State Pension Age.
The main provisions of the Employment (Contractual Retirement Ages) Bill 2025, which will implement that commitment, provide that:
- in situations where an employee is subject to a contractual retirement age which is below the State Pension Age they may provide written notification to the employer that they do not consent to retire at the contractual retirement age
- on receipt of such notification, if an employer still proposes to enforce the contractual retirement age, they must not enforce the retirement before providing the employee with a written reasoned reply
- the employer must not enforce the contractual retirement age unless they can establish that the contractual retirement age of that individual employee is objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary
- employees will have the right to refer complaints and seek redress through the Workplace Relations Act for non-compliance with the Act
- there is no impact on retirement ages which are set out in law, for example for certain public servants
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