Analysis of 2011 and 2012 figures indicates that an average of just 13%, or less than 1,600 per year, of those awarded State pension (transition) (SPT), came from employment in the period immediately prior to SPT. State pension reform is essential to ensure sustainability and to address the challenges of changing demographics including increasing life expectancy. The abolition of SPT removes the retirement condition which acts as an incentive to leave the workforce and has been widely criticised as a barrier to older people remaining in employment. Currently, a person who retires from work on reaching age 65 and who does not have sufficient PRSI contributions to qualify for SPT may apply for another social welfare payment. This will remain the case when SPT is abolished in 2014. Legislation provides that, subject to having paid 156 or more qualifying contributions and satisfying the general scheme conditions, a person whose job seekers benefit expires in their 65th year will continue to be paid benefit up until the age of 66.
In relation to the employment relationship, responsibility for setting retirement age is a matter for the employer/employee relationship and the contract of employment. However, it is recognised that the range of policy areas which influence working and retirement decisions fall within the remit of a range of departments and requires a co-ordinated responses if labour market participation rates and effective retirement ages of older workers are to improve. In this regard, an Interdepartmental Working and Retirement Group is currently considering cross departmental policy issues that may support longer working and thereby improve the sustainability and adequacy of pensions systems. This Group, which includes the Department of Jobs, Enterprise and Innovation is considering the broad range of issues impacting on the labour market participation of older workers and will prepare preliminary proposals detailing measures which may encourage participation and retention in the labour market of older workers.