The recently published OECD report on the Review of the Irish Pension System confirms that reforms are necessary if we are to continue to put pension provision on a sustainable footing given the changes in demographics, the deficit in the Social Insurance Fund, and the difficult fiscal situation.
The abolition of State pension transition and the standardisation of the pension age at 66 from 2014 is part of a series of measures aimed at improving the sustainability of pensions in the future. Growing numbers of people want to work or may need to work beyond the State pension age as people are living longer. The abolition of State pension transition 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. Recipients of State pension contributory can continue to work.
Existing legislation provides that, social welfare supports, such as job seekers benefits, will continue to be available to those who meet the qualifying conditions of the schemes available. Furthermore, the legislation also provides that for those whose job seekers benefit expires in their 65th year, the payment will continue to be paid up until the age of 66 when State pension becomes payable for those who satisfy the qualifying conditions.
There is no statutory compulsory retirement age for employees in Ireland. In relation to the employment relationship, responsibility for setting retirement age is a matter for the employer/employee relationship and the contract of employment. The Court of Justice of the European Union (CJEU) has made rulings in a series of age-discrimination cases concerning Directive 2000/78/EC, which prohibit work-related discrimination on various grounds, including age. The CJEU has clarified that mandatory retirement ages may be set down by employers within the context of national law, whether by contract, custom and practice or other means, which must be objectively and reasonably justified by a legitimate social policy aim, with the means of achieving that aim being both appropriate and necessary. Enterprise policy and equality issues come within the respective remit of my colleagues, the Minster for Jobs Enterprise and Innovation and the Minister for Justice and Equality.
An interdepartmental Working and Retirement Group was initiated to consider the cross departmental policy issues arising that may support longer working and thereby improve the sustainability and adequacy of pensions systems. The interdepartmental group, established in August 2012, is chaired by the Department of Social Protection, and includes representatives from the Department of Social Protection, the Department of Jobs, Enterprise and Innovation, the Department of Justice and Equality, the Department of Public Expenditure and Reform and the Pensions Board. Further engagement has also been undertaken with the Department of Education and Skills and the Department of Health and Children.
The issues under consideration are the broad range of issues impacting on the labour market participation of older workers; enterprise issues, employment and equality law issues; proposals regarding deferral of the state pension, and consideration of occupational pension issues. It is expected that the Group will prepare preliminary proposals detailing measures which may encourage participation and retention in the labour market of older workers and present proposals to Government in the near future.
