The Irish government is soon to consider a proposal to increase the five-year 'range' during which civil servants can retire on a full pension, from the current 60-65 years of age to 62-67. This is among several suggestions to emerge from a working group which, for over two years, has been discussing the implementation of a major report from the Commission on Public Service Pensions, which was published in 2001. The Commission’s 2001 report had found that the cost of public service pensions would double between 1997 to 2012, from EUR 807 million to EUR 1.7 billion, rising by a further EUR 1.27 billion by 2027.
Retirement at the age of 67 for public servants recruited in future years is set to be one of the main changes included in a wide-ranging review of pensions in the Irish state sector, reported in August 2003.
The Irish government is soon to consider a proposal to increase the five-year 'range' during which civil servants can retire on a full pension, from the current 60-65 years of age to 62-67. This is among several suggestions to emerge from a working group which, for over two years, has been discussing the implementation of a major report from the Commission on Public Service Pensions, which was published in 2001. The Commission’s 2001 report had found that the cost of public service pensions would double between 1997 to 2012, from EUR 807 million to EUR 1.7 billion, rising by a further EUR 1.27 billion by 2027.
The specialist weekly, Industrial Relations News (IRN), reported in late August 2003 that during the working group's deliberations the public service unions proposed an increased 'window' of seven years, from 60 to 67. The public service management side responded with the proposal of a 62-67 'window', a plan that not yet been fully agreed with the unions.
If the management's proposal is approved, it will apply only to new recruits in the civil service, with existing public servants retaining the current 60-65 'window'. Therefore, the maximum cost benefits to the government of the change would not be seen for some decades. Nonetheless, since age barriers to recruitment have been removed in recent years, a growing number of new public servants are in the older age groups, which means that some benefits may be seen gradually over the next 20-30 years. One potential difficulty could be the situation of those recent new recruits who joined at ages 17-18, who would reach the current 40 years' service required for a full pension by the age of 58, but would still have four years to go before they could avail of it at 62. This problem would be more acute if the workers concerned still had to pay employee pension contributions for the four years between the ages of 58 and 62 (all new public servants since 1995 have to make full pension contributions). However, IRN reports that the Department of Finance is willing to consider either a cessation or refund of contributions for any public servants who find themselves in this situation in future decades - ie if they have reached the required 40 years’ service but are still too young to retire.
A potential benefit of the proposal, if accepted, would be to allow those public servants who entered after the age of 25 to work the extra years required to reach 40 years' service, rather than having to buy additional voluntary contributions (AVCs) to reach full pension entitlement.
It is understood that retaining a 'window' of five years during which public servants can choose to retire on a full pension was seen as more important in the recent talks that 'holding the line' on maximum retirement at age 65. Even if the new plan is approved, all new recruits to the public service will still be able to retire at 62, with no actuarial reduction being made.
Il-Eurofound jirrakkomanda li din il-pubblikazzjoni tiġi kkwotata kif ġej.
Eurofound (2003), Later retirement on horizon for public servants, article.
