Irish workers’ approach to career longevity is changing, but Irish companies are ill-prepared for a labour force that wants to continue working for longer, according to a survey by Willis Towers Watson.
The corporate advisory experts surveyed 136 companies of various sizes, across a broad range of industries, to ascertain the general practice amongst Irish firms when it comes to retirement age practices, both in terms of official policy and informal case-by-case flexibility, for their workforce.
Brian Mulcair, Head of Corporate Benefits Consulting at Willis Towers Watson said: “We undertook the survey against the backdrop of a myriad of significant developments in the area of retirement age flexibility.
"Over the last year, the Government set out in its Roadmap for Pensions Reform that it has the clear aim of allowing employees flexibility to remain in the workforce for longer. The Workplace Relations Commission also released a Code of Practice for Longer Working."
In line with this, the age at which the State pension becomes payable has increased from 65 to 66, with a further rise to age 67 in 2021 and to age 68 in 2028.
Mr Mulcair said: "In light of these developments, some employers are looking to review their generally inflexible retirement age policies in order to support those employees that wish to work beyond the traditional retirement age.”
- The Willis Towers Watson survey found:
- 85% of organisations have a Current Contractual Retirement Age (CCRA) in place
- 90% of organisations have set their CCRA at age 65 - the previous State pension age
- 71% of respondents have received requests to work beyond retirement age
- 65% of respondents are currently considering the introduction of retirement age flexibility
- 18% of respondents have already introduced retirement age flexibility
Mr Mulcair said: “For many people, retirement at 65 no longer symbolises the start of the work-free era, as many employees of that age feel that they have much more to give and increasingly want to stay on, either in their current role or by contributing in some other way to an organisation. Sometimes this is out of a desire to keep working.
However, for others, it is out of necessity, with recent reports suggesting that many more people will carry a mortgage into their sixties.
"The increase of the state pension age to 66 in recent years and the increase to age 67 in 2021 will also mean that some people cannot afford to retire before they start receiving this payment.
"Although the majority of organisations believe they have given this issue due consideration, it would seem that there is a gulf between the perception of what is needed and the reality. The reality is that 71% of organisations say they have received requests to remain in the workforce beyond contractual retirement age – yet only 18% have an official policy on what to do in these situations.”
He went on to say that their results show the "very varied and mixed approach" taken by employers which indicate there is significant work left to do in order to reach best practice.
Mr Mulcair said: "Companies need to consider how they can introduce flexibility in their employment contracts and how they will deliver employee benefits including pension, death benefit cover, and health and disability benefit insurance for employees remaining in the workforce.
"Clear work policies in this regard are crucial, or employers could find themselves in challenging circumstances over the next few years as more and more employees request flexibility. Ever increasing numbers of age discrimination cases are being brought before the Workplace Relations Commission.”
