Pension age to remain at 66 in Ireland; Government proposes five different plans

DUBLIN: The Irish government has decided to keep the country’s pension age at 66, but allow those who want to work until the age of 70. The Taoiseach said the pension age will not go beyond 66 and companies will be banned from forcing retirement.

For workers who retire after the age of 66, five different rates of State Pension will be paid depending on the length of years. People who stay in the job get a ‘bonus’ every year. The fundamental details of the pension system, which was approved in principle at the executive meeting held last week, are yet to come out, and the related legal structures also need to be approved.

Government sources also indicated that there will be an increase in PRSI payments in the future for the restructuring of the pension scheme.

The current state pension is €253.30 per week for someone retiring at 66. However, in this new plan workers will receive a higher rate for each year they delay retirement. It has not yet been decided what the top rates or PRSI contributions will be.

The plan was drafted by Social Protection Minister Heather Humphreys, whose department officials are working on a new strategy to be announced later this year. However, all three allies in the government have taken a stand in favor of these.

This ensured that the commission’s recommendations to gradually raise the pension age to 67 in the coming years would not be implemented as the constituent parties in the government had wanted.

The move is seen as a political compromise between Fianna Fáil, who insisted on keeping the state pension age at 66 at the last general election, and Fine Gael, who campaigned to raise it to 67 to counter the threat of a growing pension bill.

Speaking during his visit to Japan, Micheál Martin said employees will still be entitled to a pension at age 66, but will be given the option to work longer if they choose.

Mr Martin said: “This idea of retiring at 66 has to go. I think the market will dictate this, but equally we want to make sure there’s no discrimination against people of that age because people are living longer, they’re healthier, quality of life is improving.

“It depends on the professions as well, the kind of work you’re doing. Not everybody, for example certain employments, can keep going to 70 because the work is just too difficult or too burdensome.” But the Taoiseach said that governments should commit to organizing and providing workplaces to enable such people to continue and utilize their skills.