EMPLOYEE PLANNING

Contents THE RETIREMENT AGE ...... 2 ENFORCING RETIREMENT ...... 2 RETIREMENT AND LAW ...... 3 Statutory Retirement Age ...... 3 Self-Employed People ...... 3 AGE EQUALITY IN EMPLOYMENT ...... 3 RULES ...... 4 Age discrimination ...... 4 Where discrimination arises ...... 4 Exclusions from the general prohibition of discrimination on age grounds ...... 4 PROCEDURE ...... 4 INFORMATION FOR RETIRING EMPLOYEES ...... 5 Working in Retirement ...... 5 Income supports while retired ...... 5 ...... 5 Taxation ...... 6 Information ...... 6 Lifestyle Changes ...... 6

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THE RETIREMENT AGE

Despite the misconception, there is no single retirement age in Ireland, although 65 is generally regarded as the age most people retire. There are upper age limits that restrict entry for various activities, such as entry to some .

Many contracts of employment have a age - the age at which employees must retire. The usual retirement age in contracts of employment is 65. Many employment contracts, however, make provision for early retirement from age 60, (or in some cases, from age 55). Most also make provision for early retirement on health grounds.

The Employment Equality Acts provide for age equality in employment but they do not prevent the setting of a retirement age within the contract of employment provided that the specified age can be objectively justified. If an employee opts for early retirement, they may need to take various steps to ensure that they maintain their entitlement to social welfare pensions.

The current age of retirement is 66 with an upward revision planned for 2021. However, there is no statutory retirement age.

If an employer plans to enforce a particular retirement age every contract provided should specifically stipulate what the company’s retirement age will be.

There seems to be a lot of confusion around how to implement retirement. Here’s how:

 First, if you wish to enforce a retirement age within your organisation make sure the following clause is contained in the contract of employment: “The company’s retirement age is (65)”  Next, 6 months prior to an employee reaching this age, an employer should write to the employee, reminding them that will be reaching retirement age on (date) and reminding them that they will be retiring from work at that point.  Employees can ask to continue in work, or they can just take retirement. If they wish to continue: o Carry out a risk assessment to identify where potential problems / challenges might impact on their ability to do the safety and effectively. o If their current job is a challenge – Investigate what other you might be able to offer. Remember, they still have years of experience to offer you and your business. o Only if you have an objective reason for doing so can you insist that they retire. ENFORCING RETIREMENT

It is becoming increasingly difficult to enforce a retirement age. In general, an employer may enforce retirement only where: • The company has a stated mandatory retirement age, either in a contract of employment or published policy document which employees are aware of; and • The employer can provide objective justification for the retirement. There should be a legitimate aim in relation to the setting of the retirement age and the means of achieving that aim (i.e. the setting of the compulsory retirement age) must be appropriate and necessary • An employee is no longer able to fulfil the terms of their contract (for medical, or health and safety reasons) and no alternative position is available.

What constitutes objective justification prescriptively defined but case law provides that an employer’s aims in setting a contractual retirement age may be social, demographic, budgetary or in the public interest. Costs alone will not be a legitimate aim. Examples of objective justifications affirmed by Irish, UK or EU courts in specific cases include:

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 Establishing a balanced age structure, encouraging of young people  Inter-generational fairness or preserving the dignity of older workers;  Motivation and dynamism through the increased prospect of promotion;  To ensure that vacancies became available in order to encourage the recruitment and promotion of younger people;  Desire to avoid capability issues;  Health and safety concerns for the public and the employee – generally only applicable to employees in more safety critical occupations;

What if the employee is over the retirement age?  An employee may continue working beyond retirement age on a fixed-term contract.  However, where there is a concern about an employee carrying out certain tasks and duties, arrange for a Health & Safety Risk Assessment to be carried out.  Based on the results, you should either offer alternative or reduced duties, or indicate to the employee that due to health & safety or even medical considerations they will be required to retire.  Be aware that redundancy rules may apply.

RETIREMENT AND EMPLOYMENT LAW

The principle legislation is:  Employment Equality Act, 1998 - 2015, which details the areas where discrimination can occur (age being one of 9 such areas);  The Equality Act, 2004, provides further guidance and clarity on matters of discrimination;  Finance Act, 2011 (Lump sum payments);  and relevant Protection of Employment Acts as they relate to employment types. Statutory Retirement Age There is a statutory, (that is, set out in legislation), retirement age for some public servants. This is generally 65. Recently appointed judges have a statutory retirement age of 70, while longer serving judges may remain in office until age 72. Self-Employed People In general, self-employed people do not face age limits. General practitioners must retire from the General Medical Services scheme at age 70 - this is a statutory provision. However, they may continue in private practice if they meet the fitness to practice criteria set by the Medical Council.

There is no general age limit for company directors, but sometimes the company's articles of association may specify an upper age limit. AGE EQUALITY IN EMPLOYMENT

 The Employment Equality Acts 1998-2015 prohibit discrimination in employment on a number of grounds, including age. It is unlawful to discriminate against anyone in employment on grounds of age. The Acts only apply to persons above the maximum age at which a person is statutorily obliged to attend school (16 currently). However there are a number of exceptions to the general principle of non-discrimination. The Acts also provide for positive action on a number of grounds including age.

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RULES

The Employment Equality Acts 1998-2015 outlaw direct, indirect discrimination and discrimination by association at work and in all aspects of employment on the grounds of gender, civil and family status, sexual orientation, religion, age, disability, race and membership of the Traveler community. Age discrimination Discrimination is defined as the treatment of one person in a less favorable way than another person in a comparable situation on any of the grounds specified. It will cover not only current and past discrimination, but also discrimination that may exist in the future or is imputed to a person. Where discrimination arises The Acts outlaw discrimination by:  Employers;  Employment agencies,  Providers of vocational ;  Trade unions;  Employer organisations;  Professional bodies;  Trade associations or  The Acts also outlaw discrimination in job advertisements.

Prohibited discrimination relates to equal pay, access to employment, conditions of employment, training or experience, promotion or regrading or classification of posts. Conditions of employment do not, in this context, include pensions.

Indirect discrimination occurs where an apparently neutral provision puts persons of a particular group covered by the Acts at a particular disadvantage and where the provision is not objectively justified by a legitimate aim and the means of achieving the aim are not appropriate and necessary. Exclusions from the general prohibition of discrimination on age grounds An employer may:  Set a minimum age requirement (not more than 18 years) for potential applicants for a job.  Offer a fixed-term contract to a person over the compulsory retirement age. However, where fixed term contracts are offered post retirement the employer will have to demonstrate evidence of objective justification for the termination of the employment and the issuing of fixed term contracts.

There are also exemptions inserted into Section 34 by Section 23 of the Equality Act 2004. With regard to an occupational benefits scheme, it does not constitute discrimination on age grounds for an employer to:  Fix ages for admission to such a scheme or for entitlement to benefits under it  Fix different ages for all employees or a category of employees  Use, in the context of such a scheme, age criteria in actuarial calculations  Provide different rates of severance payment for different employees or groups or categories of employees, these rates being based on or taking into account the period between the age of an employee on leaving the employment and his or her compulsory retirement age provided that these measures do not constitute discrimination on the gender grounds. PROCEDURE

Whatever the retirement age is specified in an and it is the employers intention to enforce this retirement age, it is the responsibility of the employer to ascertain the intentions of the employee to take retirement.

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This is done by the employer writing to the employee 6 months prior to the contracted retirement age, reminding them that they are due to reach the specified retirement age and asking them whether they in fact intend to retire. The employee must reply, in writing, stating what their intentions are.

In some circumstances, in may be necessary for the employer to carry out a health & safety risk assessment to ascertain whether the employee remains capable of dealing with the physical aspects of the job, if they wish to continue working. This might result in alternative employment being offered, if possible, or the employee being offered redundancy if no alternative employment is available.

In the event that an employee does not respond to the 6 month letter, as requested, the employer may enforce the specified retirement age and terminate the employee’s contract at the point where the specified age has been reached. This must be done in writing in accordance with notice of termination periods, as stated in the employee’s contract (or 1 month prior to the contract termination date (retirement date) if no contract is in force.

INFORMATION FOR RETIRING EMPLOYEES

Working in Retirement Some retired people may simply have retired from one occupation. For that reason, you may regard retirement as a job change rather than a total withdrawal from the labour market. Retiring from work therefore may simply signal a change. Most legislation dealing with the protection of employees in Ireland does not have an upper age limit. This means that if you are working in retirement, then you have the same employment rights as everyone else. If you decide to work part-time, you can find out about employment rights of part-time workers. Income supports while retired Before you decide to retire from work, you may need to know what income supports are available. If you are a farmer, you may need to know about the Farm Retirement Scheme which aims to encourage farmers to pass on their land to younger farmers.

If you are taking early retirement, you may consider yourself unemployed rather than retired and you may need information on benefits for unemployed people. If you are made redundant you may be entitled to a statutory redundancy lump sum. To be eligible for a redundancy payment under the Acts, you must satisfy the following requirements:  You must be in employment that is insurable under the Social Welfare Acts. Full-time employees under the age of 66 must be paying Class A PRSI. (This insurability requirement does not apply to part-time workers)  You must have worked continuously for your employer for at least 104 weeks.

If you retire early, for whatever reason, you may be entitled to Jobseeker’s Benefit and subsequently, to Jobseeker’s Allowance. You may also be eligible for a range of back to work and back to schemes. Pensions There are various types of available. You may have contributed to a pension scheme during your working life, in which case you will get an occupational pension or have a personal pension arrangement. You need to deal directly with the pension provider to find out exactly what benefits your pension gives you.

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If you made sufficient PRSI contributions during your working life and you retire at 65 you may be entitled to the State Pension (Transition). At 66, you may be entitled to the State Pension (Contributory). If you have not made sufficient PRSI contributions, you can apply for a State Pension (Non-Contributory), which is means-tested. You may also be entitled to Free Travel and to the Household Benefits Package Taxation You may need to find out about how lump sum compensation payments are taxed. There are some special tax arrangements for people aged 65 or over. You may also need to find out how pensions are taxed Information For many of us, the prospect of retirement from work provides an opportunity to seek fresh directions and new challenges. You may, for example, be thinking of taking up a different area of paid or voluntary work, learning some new skills, embarking on some travel or just spending more time on a favourite hobby or pastime.

Planning for your retirement will give you the best chance of maximising your time, adjusting to this lifestyle change and help you budget for the type of financial security you would like during retirement. People in Ireland today are living longer, healthier lives so it's important to plan in advance for this new phase in life. Lifestyle Changes For most of us, the transition (or move) from work to retirement takes place on a specified date and is not negotiable. In other words, you retire from work when you reach a particular age or another date that is set out in your contract of employment. Other people may be in a position to gradually ease into retirement by reducing their workload or doing part-time work. The following information outlines the various issues that may arise as you make the change from work to retirement and provides information that may help you to make a smooth transition. A number of organisations throughout the country provide pre-retirement courses which may help you to prepare for retirement. Active retirement is a concept while has become increasingly popular in Ireland and there are a range of active retirement organisations which promote education and leisure activities for retired people:

Retirement Planning Council of Ireland (www.rpc.ie) The Council aims to prepare people for the period of their lives which begins after they retire from work. It develops and organises preparation for retirement and life changing courses, helping them to become aware of the advantages and problems of retirement.

 Activities Activity-based groups include active retirement associations, sports, arts and culture groups. Some of them are largely concerned with providing a social outlet, others organise all sorts of activities including traditional leisure activities and education and training. o Active Retirement Ireland (ARI) (www.activeirl.ie) A national network of local active retirement associations whose purpose is to enable retired people to enjoy a full and active life and to advocate for them. You can contact ARI to find your local active retirement association or to get information on how to set up a new group. o Age and Opportunity (www.olderinireland.ie) Age and Opportunity works to promote opportunities for greater participation by older people in society in a range of areas from the arts and physical activity to promoting age equality.

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 Campaigning A number of organisations lobby for the rights of older people in Ireland. They campaign to raise awareness of the issues affecting older people and influence government policy. They include: o Older & Bolder (www.olderandbolder.ie) Alliance of non-governmental organisations that champions the rights of all older people and is working towards the attainment of an age- friendly society. o Older Women’s Network (www.ownireland.ie) National network that links individuals and groups of women aged over 55. The network provides a forum for older women to meet together to share their experiences and discuss issues of concern. It works to bring about positive change and the social inclusion of older women. Membership of OWN is open to women who support its aims and who live in Ireland. o Irish Senior Citizens Parliament (www.iscp.wordpress.com) The organisation represents the interests of senior citizens to government and other public bodies on issues affecting older people such as income, health or housing. o National Federation of Pensioners’ Associations (www.nfpa.ie) As a representative body for pensioners’ organisations the Federation aims to protect and promote the interests of pensioners and retired people with regard to social welfare, health, superannuation and tax. o Age Action Ireland (www.ageaction.ie) Age Action Ireland is a national advocacy body on ageing and older people. The organisation aims to achieve fundamental change in the lives of all older people by empowering them to live full lives as actively engaged citizens and to secure their rights to comprehensive high quality services according to their changing needs.

Source: Various Date: May 15th, 2013 Updated: April 18th 2016

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