Committee recommends pension age to remain at 66

Committee recommends pension age to remain at 66

THE OIREACHTAS Committee on Social Protection has recommended that the pension age remains at 66 in Ireland, despite a recommendation from the Commission on Pensions for it to be increased.

It comes following a request by Social Protection Minister Heather Humphreys to consider the findings of there report.

The Commission had recommended that the age be gradually increased by three months each year beginning in 2028, bringing the pension age to 67 by 2031

Further increases of three months every second year from then would bring the pension age to 68 by 2039.

"The Committee is strongly of the view that the State Pension must be protected and that no further increases to the qualifying age should take place," said Cathaoirleach of the committee Denis Naughten.

This was due to the provision of the State Pension being dependent on the collection of PRSI receipts.

"It is expected that the PRSI base will contract significantly over the coming decades and this will affect the available funding.

"The Committee held many discussions regarding the development of new funding mechanisms to ensure that the current pension age is maintained."

The demographic change refers to the projections that the ratio of the working age population to older people will significantly decrease over time, the report states.

There are currently 4.5 people of working age for every pensioner, but that is set to increase to 3.5:1 by 2030 and 2.3:1 by 2051.

"This expected decrease in the working age population poses a risk to the State Pension, and other social protection supports, as a smaller working age population potentially means a reduced PRSI base which will have a negative effect on the fiscal position of the SIF," the report says.

"The proposed increase in the qualifying age for the State Pension is an attempt to mitigate this by decreasing the number of people eligible for the State Pension while simultaneously expanding the tax base by increasing the number of people in the workforce."

The Committee says it is "unconvinced" that the gradual increase in the pension age will have a "meaningful impact" on the Social Insurance Fund.

It is also of the opinion that "many people aged 66 or over could not reasonably be expected to continue working due to the physical and mental stress that their jobs have caused over many years (sometimes in poor work, health and safety conditions) taking into account the work they are trained for."

The Committee also recommended that legalisation is developed to ban the use of mandatory retirement clauses in employment contracts.

It is also recommended that any such legislation can be applied retrospectively to include ongoing contracts.

Speaking on RTÉ's Morning Ireland, Naughten said evidence from 65 countries, where people are forced to retire at 65, found it can have a detrimental impact on their health.

The Committee recommends that flexibility is also allowed for those with 40 years contributions to access their State pension by age 65, and for mechanisms to be developed to ensure equality exists between men and women regarding State pension entitlements.

Former Pensions Ombudsman Paul Kenny also spoke on Today with Claire Byrne to say that he believes the pension age will have to increase to 66

"They’re living longer as well which means we’re going to be paying for longer."

"If we were five years away from a General Election the answer might be slightly different from what it is today," he said.