In a positive ageing environment, workers should be facilitated in working beyond normal retirement age
The Minister for Public Expenditure and Reform, Paschal Donohoe, T.D., today (Friday) published the Report of the Interdepartmental Group on Fuller Working Lives chaired by his Department (link here), which has been agreed by Government.
In January, the Government agreed to the establishment of the Working Group to consider policy around retirement age in both the public and private sectors. The Group was charged with examining the implications arising from retirement ages now and in the future and making recommendations on a policy framework to address the issues identified and to support fuller working lives*.
The establishment of the Group came in light of the fact that people are now living longer, more active and healthier lives, as well as in light of the demographic pressures associated with an ageing population. Expenditure on State pensions and relevant supplementary payments is set to rise from €7 billion in 2016 to €8.7 billion in 2026, assuming no rate changes – notwithstanding the rise in the age of eligibility for the State Pension from 66 to 67 in 2021 (and 68 in 2028). Consideration was also given to the mental and social, as well as the economic, benefits associated with supporting people to work later in life.
The Group found that if the increases in the State pension age are not matched by longer working, future incomes for those retiring before reaching the age of eligibility for the State pension will become an increasingly prevalent issue, with implications across a number of policy areas.
It also found that, in line with the vision set out in the National Positive Ageing Strategy, Ireland should be a society that explores the opportunities associated with longer, fuller working lives by preparing properly for population ageing and supporting older people’s continued engagement in economic and social life. To that end a shift in ‘cultural norms’ around retirement age is needed on all sides.
In a positive ageing environment, workers should, to the greatest extent possible, be facilitated with the option to work beyond normal retirement age. This should be done with a degree of flexibility and certainty for staff which should be clearly communicated by management. The Report also recognised the fact that appropriate training and other supports for older workers may be needed to enable them to remain active participants in the labour market and in communities, with all actors – the State, employers and workers themselves – having responsibilities in this area. The Social Welfare system should continue to provide a safety net for those who, for health or other reasons, are not in a position to work longer.
The Group has identified a set of framework principles to underpin policy in this area and has made the following recommendations which will now be implemented by the relevant Departments:
- The Department of Jobs, Enterprise and Innovation is to ask the Workplace Relations Commission to prepare a code of practice around the issue of longer working;
- Employers should take steps to ensure that their policy on retirement age is clearly articulated;
- Employers and workers representatives should take measures to improve awareness among both workers and employers of options, rights and responsibilities around longer working;
- The Department of Public Expenditure and Reform is to review, with public service employers, the barriers to extended participation in the public service workforce up to the age of entitlement to the State Pension;
- The Department of Justice is to ask the Irish Human Rights and Equality Commission to ensure that appropriate guidance material is made available to employers on the use of fixed-term contracts beyond normal retirement age; and
- The Department of Education is to request SOLAS (The Further Education and Training Authority) and the Education and Training Boards in the context of the National Skills Strategy to develop appropriate solutions tailored to the needs of older workers in order to support them in staying attached to the workforce.
Commenting on the publication of the Report, the Minister said: ‘I welcome the Report of the Interdepartmental Group on Fuller Working Lives. This is an important piece of work. People are, thankfully, living longer and healthier lives and this trend will continue into the future. An ageing population does creates challenges as well as opportunities that need to be explored. We need a policy framework to support those who want to continue to make an active contribution throughout their lives, including through work. Together with the National Positive Ageing Strategy, the recommendations set out in this Report will help us to achieve that’.
“This is a complex and multi-faceted issue. I would like to thank stakeholders for their input to the Group’s work. It will be important that the State, employers, trade unions and community and voluntary groups work together to advance this agenda and to ensure the recommendations are implemented, so we can provide for the future and plan for citizens’ fuller working lives.”
*The remit of the Group did not include an examination of pension entitlements, nor did it revisit key pension policy reform decisions already taken.