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Wednesday 29 March 2017

State will begin process of raising retirement age to 68 in four years

Aine Kerr

THE State will gradually increase the pension age to 68 over the next 20 to 30 years under a radical new plan that is to be published tomorrow.

The retirement age will be raised from 65 to 68 in stages, with each increase phased in over several years.

The process of raising it to 66 is expected to start in around four years' time, the National Pensions Framework is expected to state.

This follows government projections that the number of people aged 65 and over will increase from around 450,000 now to 1.8 million by 2050.

If the retirement age was left at 65, in 40 years' time more than a quarter of the country's entire income would be spent on the pensions, health and long-term care of pensioners.

The new framework document is the culmination of three years' work in the Department of Social and Family Affairs. It will be launched by Taoiseach Brian Cowen, Finance Minister Brian Lenihan and Social and Family Affairs Minister Mary Hanafin.

Mr Cowen last night confirmed a report in yesterday's Irish Independent, detailing the plans to increase the pension age. But he stressed that they were part of a "very long-term framework" and there would be "no immediate change".

"Obviously, one is setting out our very long-term framework, whereby you have to look at the demographics -- the change in the number of people who'll be at work, compared to those who will be retired," Mr Cowen said.

Strategy

In Britain, for example, the state pension age will rise to 66 in 2024, to 67 in 2034 and 68 in 2044, with each increase being phased in over two years.

The Government here is understood to be pursuing a similar strategy, albeit with different timescales.

The pension framework will also spell out how the change will affect long-serving workers compared with new recruits.

The Centre for Ageing Research and Development in Ireland predicts that the number of people aged 75 and over will hit one million by 2041. That is three times more than the current figure.

At the moment, most occupational pension schemes allow workers to retire at the age of 65, while the state contributory pension is paid from age 66.

A state transition pension is paid from 65 years for those who retire before 66.

The head of the trade union movement, ICTU general secretary David Begg, said he had been calling for an increase in the pension age in the private sector for years because many of the pension schemes were in serious financial trouble.

Irish Independent

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