Retirement, as we currently observe it, did not exist 100 years ago but extended lifespans have promulgated the idea. Its origins are to “draw back” and it has come to mean a final withdrawal from active working life. Given its very recent history it is extraordinary that age 65 has become ingrained in the consciousness as the “retirement age”. In truth, there is no single, fixed retirement age for workers – think self-employed persons!
It is quite common that employees have a retirement age set out in their employment contracts but some of the existing laws and mores have been slow to adapt to current trends, which see people wanting to continue to work beyond the nominal finish line. In some cases, there is a statutory retirement age for those working in public-service jobs and such like. But for most employees there is a mandatory retirement age at which they simply must retire.
Evidence suggests that many private companies have used the mandatory retirement age to offload long-serving employees for younger, more energetic and cheaper equivalents. But this practice may be changing. The Workplace Relations Commission has issued new Codes of Practice pursuant to the Industrial Relations Act, 1990 and the more recent Equality (Miscellaneous Provisions) Act, 2015.
As a result an employer may establish a retirement age for an employee only where it is reasonably justified to do so and where it can be shown to be appropriate and necessary. The Codes of Practice also insist that employers do more to help employees understand and cope with retirement by providing suitable pre-retirement courses; counselling; flexible working arrangements and guidance on the sources of useful, unbiased information.
While it’s accepted that many employees can’t wait till they finish up – there is also a growing cohort that wants to keep going; maybe not at full throttle but to continue working nonetheless. The Codes place an onus on employers to engage with employees well in advance of retirement age to ensure that both parties are aware of the other’s position.
The statutory retirement age across most of the public sector is 65 for people who joined before 1 April 2004. For those who joined after that date the minimum retirement age is 65 and the mandatory retirement age may be negotiated. For people who joined the public service after 1 January 2013 the minimum retirement age is 66 and the mandatory retirement age is 70. So public-sector workers are being offered more flexibility and are not faced with a stone wall.
There is little doubt that people will giggle at these age limits in 100 years’ time – but significant changes may well take place long before then. These changes will have significant implications for the pension and insurance industries. They will have to re-evaluate their business models to accommodate, for example, illness cover for workers in their 70s/80s and a declining period of pension income; while actuaries are already battling with extended lifespans and their worrying implications. Anybody fancy retirement?