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Abolish Mandatory Retirement and Maintain the Pension Age At 66 - Age Action Welcomes the Recommendations of the Joint Oireachtas Committee on Social Protection, Community and Rural Development and the Islands

Published 02/02/2022

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(2 February 2022) Age Action welcomes the report of the Oireachtas Committee on Social Protection, Community and Rural Development and the Islands, which responds to the report of the Pensions Commission. The recommendations of the Oireachtas Committee to abolish mandatory retirement clauses, to maintain the pension age at 66 and to ensure gender equality in the State Pension system would be significant steps towards a fairer pension system if implemented by Government.

Nat O’Connor  Age Action’s Senior Public Affairs and Policy Specialist said that “People pay their social insurance on the basis that this will give them an adequate pension income in retirement. The Oireachtas Committee on Social Protection has made thirteen recommendations that would help to ensure Ireland’s pension system is fair, flexible and secure into the future.

Age Action is glad to see that the Oireachtas Committee agrees that raising the pension age is not the solution to funding the pension, as it would only cover 16% of the future cost. We agree that it will be necessary to increase the PRSI paid by employers and the self-employed to fund the higher future cost. It is also the case that productivity in the economy has increased immensely since the State Pension was introduced, and further increases in productivity will play an important role in providing the economic activity and taxation that will fund the State Pension.”

Mr O’Connor continued, “Many people want to work beyond the age of 65, but are currently forced to retire by a mandatory retirement clause in their contract. This is a waste of talent and experience in the economy. The Oireachtas Committee’s recommendation to abolish mandatory retirement, including within existing contracts, is of central importance. Rather than raising the pension age to force everyone to work longer – including people who are unable or who have already worked for 45 years or more – it makes much more sense to give people choice and control over when they transition from work to retirement. For many people, the option of working part-time in their later years would be attractive. Employers would benefit by keeping expertise and knowledge for longer.

“The current discussion of hybrid working practices after COVID-19 has opened up new opportunities for better work-life balance alongside higher productivity, while reducing wasted time spent in long commutes. In a similar way, a national discussion on employing older workers and a better transition from work to retirement would yield economic and social benefits.

“The Oireachtas Committee did identify the challenge of funding an adequate and secure State Pension for all. Unfortunately, the terms of reference of the Pensions Commission precluded it from fully exploring what would be an adequate pension to meet the real cost of living. Age Action continues to call for the State Pension to be benchmarked against all of the costs associated with older age – for which we need a comprehensive cost of ageing study – and to be indexed against the rising cost of living and average wage increases, so that people in retirement do not fall behind the rest of society.” Mr O’Connor concluded.

ENDS

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Concerns about Proposed Amendments to the Fair Deal Scheme in Relation to Rental Income

(10 May 2022) Age Action will address the Joint Oireachtas Committee on Housing, Local Government and Heritage on Planning: on the Provision of housing for older people, including Fair Deal on 10 May, where they will advocate for a package of safeguarding measures to be put in place to protect older people living in nursing homes as well as reforms to allow 100% of rental income on the person's primary residence to be disregarded by the HSE under the Nursing Home Support Scheme (Fair Deal).