From Department of Public Expenditure, NDP Delivery and Reform
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The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD yesterday (05 December 2017) secured Government approval for an increase in the compulsory retirement age from 65 to 70 for public servants recruited before 1st April 2004.
The minimum pension age (the earliest date at which someone can retire and receive their pension) will not be affected by the new arrangements.
Legislation will be necessary before the changes come into force and the general scheme of a Bill was also approved by Government. The Minister indicated that he would ask the Attorney General to prioritise the drafting of this legislation so that the new compulsory retirement age would become effective as soon as possible.
In the meantime, the Minister announced that he had agreed with sectoral public service employers some limited interim arrangements to apply in the period between the decision and the commencement of the necessary legislation.
These arrangements will allow public servants who reach the age of 65 in that period and who wish to remain working, to retire and be re-hired so that they remain in employment up to the state pension age, which is currently 66.
In announcing the decision, Minister Donohoe pointed to the difficulties being experienced by this group of public servants who are obliged to retire at age 65 but are not eligible for the State Pension (Contributory) until their 66th birthday.
Minister Donohoe said:
"Many pensioners feel that they have earned their pension and should not have to “sign on” as a jobseeker in order to receive a portion of it. Many would prefer to continue to work to normal State pension age, rather than engage in this process, which is likely to become more protracted as the age of eligibility for the State Pension increases in 2021 and 2028".
He also pointed out that:
"Some people want to continue to work beyond the age of 65 because they are fit and healthy and feel they have more to contribute. By extending the compulsory retirement age to 70, I am addressing both of these issues, while at the same time bringing the compulsory retirement age of this group into line with that of new recruits since January 2013 who are members of the Single Pension Scheme”
The uniformed pension fast accrual group (Gardaí, Permanent Defence Forces, Firefighters and Prison Officers), who are currently required to retire early due to the nature of their work, will not be covered by the new arrangements.
Public Servants recruited after 01 April 2004 are not affected by the change. They either already have a retirement age of 70 (Single Pension Scheme members) or they have no compulsory retirement age (those recruited between April 2004 and December 2012).
ENDS
The age of compulsory retirement in the public service is generally determined by the date of recruitment of the individual public servant, and for the most part, is provided for in primary legislation. Details of the legislative provisions are set out in the table below:
Overview of Retirement Ages in the Public Service
| Group | Recruitment Date | Description | Pension Integrated with Contributory State Pension | Compulsory Retirement Age | ||||
|---|---|---|---|---|---|---|---|---|
| A | Pre-6 April 1995 | *Modified PRSI | *No | 65 | ||||
| B | 6 April 1995 to 31 March 2004 | Full PRSI | Yes | 65 | ||||
| C | 1 April 2004 to 31 Dec 2012 | “New Entrants” – 2004 Act Full PRSI | Yes | No | ||||
| D | On or after 1 Jan 2013 | Single Scheme members – 2012 Act Full PRSI | Yes | 70 |
' *With some exceptions
On foot of the Report of the Interdepartmental Group on Fuller Working Lives , the Department of Public Expenditure and Reform, with public service employers, was tasked with reviewing the current statutory and operational considerations that give rise to barriers to extended participation in the public service workforce, up to and including the current and planned age of eligibility for the Contributory State Pension.
A Report of the review is available here.
The proposals approved by the Government will require primary legislation in order to be implemented. The General Scheme of a Bill to give effect to the new compulsory retirement age and related matters was also approved by the Government yesterday.
Under the interim arrangements, which will operate between now and the commencement of the necessary legislation, public servants who choose to remain in employment up to the age of eligibility for the State Pension (Contributory) will not accrue additional public service pension benefits in respect of that period.
These public servants will be paid at the minimum point of the relevant scale and their pension entitlements will be subject to abatement in accordance with normal practice.
Once the necessary legislation has commenced, pre-2004 public servants who opt to remain in employment after their 65th birthday will continue to accrue public service pension benefits in the normal way, subject to the statutory limit of 40 years pensionable service.
Once the 40-year threshold is reached, there will be no further pension accrual but pension contributions will continue to be paid by the employee, in accordance with normal practice.