When employees hit a certain age, they might consider stopping work. This is known as retirement.
Under Irish employment law, there is no specific compulsory retirement age for private sector employees.
It's important to know how to handle an employee who is approaching the retirement age set out in your employment contract. So you can prepare for their replacement - especially if they're a highly-skilled and valued employee.
In this guide, we'll discuss whether there's a set retirement age in Ireland, the retirement process, and whether forced retirement is legal.
What is retirement?
Retirement is a form of resignation. It occurs when an employee chooses to stop working for good.
It’s an exciting opportunity where your staff can enjoy the next chapter of their life, such as spending more time with their grandchildren.
Is there a compulsory retirement age in Ireland?
No, under employment law in Ireland there's no set age for retirement. Many employers have specific ages in their company, with the typical retirement age being 65.
It's important to remember that the retirement age is not the same as the state pension age, which in Ireland is 66 years of age.
Different retirement ages in Ireland
As there is no retirement age set out in legislation. In theory, there could be as many different retirement ages in Ireland as there are employers. Let’s take a look at common retirement ages in detail.
Mandatory retirement age
Mandatory retirement age is the age that's stated within an employment contract. It’s a specific age that your business requires employees to retire at under the terms of your employment contract. This is typically 65 and is known as mandatory or contractual retirement age.
But if you choose to take this option, it must be objectively justified as per Ireland's Employment Equality Acts 1998 - 2015. This prevents unlawful age discrimination from taking place.
There are risks for employers around enforcing a mandatory retirement age. Your business must be able to demonstrate that there is a business need for the contractual retirement age and the retirement age is a necessary and proportionate means of achieving the business aim.
These justifications may be down to Health & Safety reasons. You may have employees who want to carry on working beyond their retirement age, if this is the case they must request this at least three months before their intended retirement date.
Follow the process set out in the WRC's Code of Practice on Longer Working to reduce the risk of age-related discrimination claims arising when an employee retires.
Statutory retirement age
In certain professions in Ireland, there is a statutory age for when people retire. This means it's a legal requirement for them to stop working when they hit a certain age. For example:
- The statutory retirement age for Garda Síochána members is 60. However, those who joined the force after 2004 can choose to retire at age 55.
- Full-time Fire Service members have to retire by age 55. However, retained firefighters can apply to extend the age to 58 - but this is subject to a medical assessment being passed.
Retirement age for public sector workers
The retirement age for a public sector worker is entirely dependent on when they started working. For example, if they started work:
- Before 1st April 2004: If the workers didn't reach age 65 before 26th December 2018, they can work until the age of 70 under a new flexible State Pension System.
- Between 1st April 2004 and 31 December 2012: No compulsory retirement age.
- After 1st January 2013: The minimum retirement age is 66, with the mandatory retirement age being 70.
Retirement age for self-employed workers
For any self-employed individuals, there's no standard retirement age. However, some specific guidelines apply to certain professions.
For example, GPs (general practitioners) can continue their private practice after 72 years of age. However, they have to pass the "fitness to practise" criteria set out by the Medical Council.
Early retirement
The term early retirement refers to anyone choosing to retire before the age of 65. They may choose to retire for a couple of reasons:
- They've reached the mandatory retirement age stated in their employment contract.
- Personal reasons. For example, if a family member has fallen seriously ill.
Can you force an employee to retire?
Yes, there are some instances when an employer can force an employee to take retirement. If this is the case, you should discuss it with them before any proposed date of retirement. And follow the guidelines in the WRC's Code of Practice on Longer Working.
You can only force an employee to retire for the following reasons:
- The age when they must retire is stated clearly and applied consistently.
- You have a valid reason for having the policy in place and it's objectively and reasonably justified by a legitimate aim.
- The means of achieving this are proportionate and necessary.
Some examples of a legitimate aim are:
- Allowing employment opportunities for younger workers.
- Health & Safety concerns.
- Addressing age imbalances in the workplace.
- Succession planning.
What income can employees receive during their retirement?
Employees can receive a range of incomes once they've retired, for example through the pension system or tax breaks. However, there are also other methods which you need to be aware of.
Let's discuss some of them in more detail:
- Irish State pension (contributory): This is a weekly payment based on a person's individual Pay Related Social Insurance Record. The qualifying age for all state pensions is 66 (state pension age).
- Irish State pension (non-contributory): This is a means-tested payment given to people aged 66 or above, who don't meet the requirements for a state pension (contributory).
- Occupational pension schemes: These are employer-sponsored retirement plans that provide a consistent payment when people retire.
- Personal pension: This is a retirement savings account set up by people throughout their working life.
- Social welfare benefits: These are payments based on specific circumstances. It could include medical cards, fuel allowance or even a housing benefits package.
Your employees should speak to a financial advisor before retiring so they're financially ready to retire. They don't just have to rely on state pensions to fund their retirement. Ensure they’re aware that financial planning is a key aspect of the before-retirement process.
Get expert advice on retirement age from Peninsula
Employees of a certain age will reach a point when they want to stop working full stop, especially if they've given their whole working life to the same type of job. This is known as retirement, however, not all employees will stop working when they reach the same age.
As an employer, it's important you become familiar with the risks around compulsory retirement ages. The last thing you need is a discrimination claim being made by a senior employee who feels they have been treated unfavourably.
This is so you can prepare for when they leave, and start sourcing a replacement. It's made even more important if they're an important part of your business or on a senior level.
Peninsula offers 24/7 HR advice and support which is available 365 days a year. Want to find out more? Want to find out more? Contact us on 0818 923923 and book a free consultation with one of our HR consultants.
