Interdepartmental Group on Fuller Working Lives – Summary of Stakeholder Engagement
INTERDEPARTMENTAL GROUP ON
FULLER WORKING LIVES –
SUMMARY OF STAKEHOLDER
ENGAGEMENT
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Interdepartmental Group on Fuller Working Lives – Summary of Stakeholder Engagement
(1)
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ICTU

The impact of the current position where someone retiring at 65 (or earlier) receives weekly
social welfare income via Jobseeker’s Benefit that is €45 per week less than the rate of the
State Pension places such people at a significant financial disadvantage. For those who reach
age 65 with no such benefit (e.g. someone who retired early and has used up their jobseeker
entitlement) the loss is €230 P.W. In effect such a person will have no income unless they
qualify for a means tested payment. If their spouse is working they will receive no income.

The current position is also an unfair one in terms of the gender impacts given the work history
of many women in the workforce, who first faced the impact of the marriage bar and now
face this added penalty. The changed contribution rate bands denied €1,500 p.a. in perpetuity
to hundreds of retired workers.

SIPTU have proposed that a Supplementary Jobseeker payment be introduced to bridge this
income gap.

While accepting that it was beyond this Group’s specific remit, ICTU called for a delay in the
introduction of the increase in the State Pension age to 67 in 2021 and for the further increase
to 68 to be abandoned (on grounds that it is beyond what is currently contemplated elsewhere
in Europe).

There is a particular issue in the public service for the cohort of workers recruited between
1995 and 2004 and certain non-established industrial workers recruited before 1995 who are
obliged to retire at an age lower than the State Pension but whose pensions are integrated
with the State Pension. These people should be given the option of working to the increased
State Pension age if they wish.

It is unfair to leave it individuals to engage in litigation to secure the right to work beyond
prevailing or contractual retirement ages in the private sector. An agreed way forward
between Government, employers and worker representatives at national level would be
preferable and a tripartite engagement to this end would be welcome.

Our defined benefit pension system, with the full support of successive governments, was
based on integrated benefits and contributions where the worker paid PRSI towards the State
benefit and a suitable actuarially calculated contribution to an occupational pension to make
up usually 50% replacement income at retirement. While the private pension industry has at
least tried to honour its side of the bargain the government has welched on its commitments.
The workers affected will lose €12,000, €24.000, or €36,000 respectively depending on age.

This country is raising its Pension Age at a much faster pace than the rest of Europe. ICTU
believes this will lead to extensive retired worker poverty. This situation arises in
circumstances were there appears to have been no cost benefit analysis carried out , no
consultation, no consideration of the poverty implications being imposed on workers who
have already contributed to their pension. It is also regrettable that the only solution
suggested was possible legal redress by workers

ICTU believes that provisions should be put in place to enable any worker who wishes to
remain in employment until they reach the qualifying age for receipt of the state old age
pension, to be accommodated, irrespective of the terms of their contract. This could require
Interdepartmental Group on Fuller Working Lives – Summary of Stakeholder Engagement
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amending legislation which could be availed of by any individual worker, on any entirely
optional basis.

A one size fits all solution with regard to retirement age is not the solution as certain classes
of workers in certain sectors e.g. construction, are less likely to be physically capable of
working longer. Indeed, prevailing practice in these sectors suggests that many retire earlier
than 65, let alone 66 or 67.

The question was posed as to whether employers could fill the income gap between JB and
the State Pension for their workers who are retired before State Pension age.

ICTU also made reference to the low number of private sector workers with private pension
coverage.

ICTU will shortly publish a policy paper on pensions which should be factored into this process.

ICTU requests that a review should be undertaken of the ‘Rates Band Issue’ to ensure
compliance with gender equality legislation.

ICTU requests that any further extension to Retirement Age beyond 66 years should be in line
with the practice in the developed countries of Western Europe.

ICTU proposes that the State should carry out a cost benefit analysis of any further extension
of the pension age.
(2)
IBEC

In line with EU jurisprudence and the Equality (Miscellaneous Provisions) Act, 2015, employers
can set a retirement age subject to reasonable conditions – objective justification.

Data from IBEC members suggests the existing practice is that most employers either set a
contractual retirement age, have regard to “custom and practice” or reflect in the
documentation attaching to an occupational pension scheme.

There is not much evidence that employers are moving to re-align retirement age to 66.

Employers would accept that a gradual increase in retirement age is needed. There are
advantages to organisations in terms of skills retention. That said, they recognise that, for
practical reasons, retirement ages will continue to vary in sectors depending on the nature of
the work involved.

State supported training is needed to support older workers to keep skills current and to
master ongoing technical developments. However, it has to be borne in mind that Ireland still
has a young population, and workforce, in European terms. Retention of people in the
workforce longer does have implications for youth employment opportunities.

Uncertainty over retirement can give rise to problems of staff retention – how do you retain
talent if retaining older workers reduces promotional opportunities for younger staff?

One tool that has been available has been the use of 1 year fixed-term contracts which
employers have in certain instances offered to 65 year old employers to enable them to stay
on till the new State Pension age of 66. However, IBEC have suggested that the recent
Interdepartmental Group on Fuller Working Lives – Summary of Stakeholder Engagement
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legislative amendments contained in the Equality (Miscellaneous Provisions) Act, 2015 have
had the effect of making the use of Fixed Term Contracts in this way more problematic. Such
contracts (on IBEC’s interpretation of the legislation) are now also subject to ‘objective
justification’. IBEC have had to caution members against using contracts for this purpose for
this reason. The impact of this is to remove a tool employers had been using to facilitate
longer working.

IBEC mentioned dialogue at EU level between ETUC and Employer Representatives on the
issue of active ageing and this may have relevance for the Group’s work.

Certainty around retirement is a fundamental issue for business. An absence of such certainty
could give rise to employee relations issues. Managing people out of a business could give
rise to issues of dignity for the individual as well as an administrative burden on employers.
For this reason, employers favour a set age as a trigger for retirement over a performance
management process.

Also employers need to have flexibility – flexibility to set retirement, to manage their
workforce and to deal with succession planning.

IBEC mentioned that they have had positive feedback from employers who have kept workers
on post 65.

They accepted that there may be merit in agreeing a way forward between the Government,
employers and unions.
(3)
C&V Pillar
The following Groups attended the consultation meeting and contributed views on behalf of their
organisations: The National Women’s Council of Ireland, Social Justice Ireland, Age Action Ireland, Irish
Rural Link, The Irish National Organisation of the Unemployed and the Irish Senior Citizens
Parliament. The following is a synthesis of the points raised:

The complexity of the current system was highlighted. While outside of its remit, the Group
needs to have regard to the broader context and, specifically, the overhanging challenges that
exist. Basic Income or universal pension arrangements were advanced as better overall
alternatives to the current system.

Compulsory retirement of employees by their employer is discriminatory and unfair. If older
workers are able to continue working they should be facilitated to do. Reference, in this
regard, was made to the successful abolition of the Default Retirement Age (DRA) in the UK in
2011.

It is not reasonable to expect everyone to work longer. An adjustment needs to be made for
more arduous occupations where it should be possible to secure a State Pension below
66. This differential approach applies in certain European countries, including France, Italy
and Austria. It was suggested that an option might be to incentivise such people to contribute
to their communities by providing a supplementary payment to bridge the gap to the State
Pension in respect of such activity. The decision to exempt those aged 63 and over from the
requirement to engage in activation, while leaving the option available, was welcomed.
Interdepartmental Group on Fuller Working Lives – Summary of Stakeholder Engagement
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
Ageism and the challenges faced by older jobseekers was also stressed and solutions were
needed in the context of promoting fuller working lives.

The rural dimension was also emphasised. Most employment in rural areas is provided by
SME’s, which in general terms do not provide occupational pensions and who, in the main,
implement a policy of retirement at 65. It is important that people forced to retire at this age
are not penalised in terms of adequate income provision. In determining policy reference
should be made to the previous early retirement from farming incentives and the role they
played in stimulating improved economic development in rural areas.

Reference was made to the practice by employers of taking people back post-retirement on
fixed-term contracts with less favourable terms to those they enjoyed in their pre-retirement
positions.

It was also asserted that the argument that longer working contributes to more youth
employment has not been borne out in studies.

The point was made that the SIPTU Supplementary Jobseeker Benefit proposal would only
provide a short-term solution and would only benefit those working at age 65. There is a
need to look at the adequacy of income more broadly to encompass older people not in work
at 65.

Any solutions need to deal with everyone and not just particular cohorts. Reference in this
regard was made to the Longer Living Bill directed at workers in key professions. Solutions
need to be gender-proofed, poverty-proofed. Recommendations should also be consistent
with the other elements of pension policy under review by DSP and with the National Positive
Ageing Strategy.

Solutions need to be about choice for the worker. Policy should incentivise employers to
facilitate people who want to work post-65. The availability of choice also provides people
to accrue more pension entitlements where that is needed.

The issue of a legislative solution was raised which would prevent employers retiring people
before the State Pension age.

CVP refuted the assertion that keeping workers on after retirement age can affect the
prospects of younger people getting into employment. DSP’s report backs up the CVP view;
research has shown this not to be the case in Europe.

Protestant Aid forwarded their views after the meeting:

o
Responsibility for pension gap should be shared between state and private employers
o
Employers should have stronger obligations in terms of pension provision
o
State and private employees need to be on an equal footing in regards to pensions
and access to pensions – but it should not be a race to the bottom.
After the meeting AAI noted that the desire to work longer is chiefly linked to income, but
there is also a social element to this. For many older workers, particularly those who have
been with the same employer for some time, being forced to leave their job cuts them off
from friends made through work, reduces their levels of social interaction and diminishes their
confidence and sense of self-worth.