No Retirement age and redundancy

[Purple]

If there is no retirement age (as is being suggested at the moment) will redundancy liabilities continue to accrue forever?
How will employers get rid of employees who are no longer fit to work due to their age without going through endless rounds of litigation?

 

[thedaddyman]

I was always led to believe that a person needs to be physically capable of doing their job and if they are not, then an employer is under no obligation to retain them. Secondly, any non-statutory redundancy payments can be capped and most employers do that. The max stat liability is €1200 per year of service.

 

[Purple]

I was always led to believe that a person needs to be physically capable of doing their job and if they are not, then an employer is under no obligation to retain them.

Sure, but how does the employer prove that without getting sued?

Secondly, any non-statutory redundancy payments can be capped and most employers do that. The max stat liability is €1200 per year of service.

Yes, and if they choose not to retire until they are 78 instead of 68 that’s an extra €12’000. Some of that used to be refunded through the employers social insurance payment but now employers get nothing for the 10.75% they pay.

 

[thedaddyman]

Sure, but how does the employer prove that without getting sued?

Like everything, you go through a process, I've done it in the past with someone and it involved getting a series of medical reports that showed clearly that the person was not fit and capable of doing the job in question (or any job for that matter) . I'm not saying it's easy, it's not but you follow a process and there is good advice out there from various industry bodies which can help as well. Remember this can happen for someone at any age, in my case the person was in her early 50's.

As for someone wanting to work until they are 78, good for them. Why would you want to get rid of an employee who wants to come to work every day if they are capable of doing the job?. Also, why would you have to make them redundant if they are physically capable of doing the role and performing adequately.

 

[Steven Barrett]

They aren't suggesting that there is no retirement age. They are talking about being able to move it in line to when people will receive the old age pension. With no transitional pension anymore, people who retire at 65, have to wait a year to receive the OAP. They have to apply for the dole for that year now.

The OAP will not payable until age 67 in 2021 and 68 in 2028, while the dole is only payable for 9 months. After that, it is means tested. It's not right that someone should have to spend their life savings to fund that few years. Allowing them to working longer is the easiest solution while the government flaff about on what to do about the long term costs of pensions.

As long as someone is able to work, they should be allowed to. Warren Buffett's business partner, Charlie Munger, is 92 and still going. Buffett is 85 himself and has stated that age is never an issue when they are hiring. In fact, they don't want people who look at 65 as retirement date.

In talking to people as part of my job, people who work for themselves don't seem too bothered with retirement. They seem to enjoy their work more and are quite happy to keep working (doing it because they want to, not because they have to is the issue). Employees have a much more focused date on when they can stop working, usually because (a) they work for a company that pushes them very hard or (b) they don't really enjoy what they are doing.


Steven
www.bluewaterfp.ie

 

[Purple]

Like everything, you go through a process, I've done it in the past with someone and it involved getting a series of medical reports that showed clearly that the person was not fit and capable of doing the job in question (or any job for that matter) . I'm not saying it's easy, it's not but you follow a process and there is good advice out there from various industry bodies which can help as well. Remember this can happen for someone at any age, in my case the person was in her early 50's.

So an employer could potentially have to do this with every employee. That would be a monumental waste of time and money.

As for someone wanting to work until they are 78, good for them. Why would you want to get rid of an employee who wants to come to work every day if they are capable of doing the job?. Also, why would you have to make them redundant if they are physically capable of doing the role and performing adequately.

You wouldn't. What point are you making in relation to the topic being discussed?
Where I work we have no mandatory retirement age and work with people who want to semi-retire etc. It's all very flexible. That has nothing to do with the question I am asking.

 

[Purple]

They aren't suggesting that there is no retirement age. They are talking about being able to move it in line to when people will receive the old age pension. With no transitional pension anymore, people who retire at 65, have to wait a year to receive the OAP. They have to apply for the dole for that year now.

The OAP will not payable until age 67 in 2021 and 68 in 2028, while the dole is only payable for 9 months. After that, it is means tested. It's not right that someone should have to spend their life savings to fund that few years. Allowing them to working longer is the easiest solution while the government flaff about on what to do about the long term costs of pensions.

OK, my understanding is that they are suggesting that there is no retirement age within businesses and it be left to the person when they want to retire.

As long as someone is able to work, they should be allowed to.

Yes and that's the question; who determines that they are able to work at the required level, commensurate with their role and pay levels and how is it determined?

In talking to people as part of my job, people who work for themselves don't seem too bothered with retirement. They seem to enjoy their work more and are quite happy to keep working (doing it because they want to, not because they have to is the issue). Employees have a much more focused date on when they can stop working, usually because (a) they work for a company that pushes them very hard or (b) they don't really enjoy what they are doing.

Bit of a sweeping generalisation there Steve. We've a guy here in his late 70's fighting cancer who still wants to work part time because he loves what he does, he enjoys the social aspect of work and it given structure to his week.
He's getting his state and private pension and is on a new contract here working two half days a week. He's an employee.

 

[huskerdu]

OK, my understanding is that they are suggesting that there is no retirement age within businesses and it be left to the person when they want to retire.


Yes and that's the question; who determines that they are able to work at the required level, commensurate with their role and pay levels and how is it determined?

.

I agree that people in theit late 60s and 70s are generally capable and often too young to retire and have a lot to gain from work and a lot of offer, but Purple has asked a serious question that has to be addressed.

In the scenario where a 68 year old in a demanding job on high wages is still nominally capable to doing the job and on paper has lots of relevant experience but in reality has slowed down enough to be only able to get through 60% of the work that the job requires and/or is making mistakes, is it fair that the employee is entitled to the job and the salary for as long as they decide, or does the employer have any rights to insist on retirement or a move to a more suitable position,

 

[Steven Barrett]

OK, my understanding is that they are suggesting that there is no retirement age within businesses and it be left to the person when they want to retire.


Yes and that's the question; who determines that they are able to work at the required level, commensurate with their role and pay levels and how is it determined?

Bit of a sweeping generalisation there Steve. We've a guy here in his late 70's fighting cancer who still wants to work part time because he loves what he does, he enjoys the social aspect of work and it given structure to his week.
He's getting his state and private pension and is on a new contract here working two half days a week. He's an employee.

My reading is different and it is to do with when the OAP is payable. A standard contract of employment will always state the retirement age for employees. If there is a pension scheme, the scheme will have to state the normal retirement age.

Who determines the retirement age is up to the employer. As daddyman stated, it will depend on the employee being physically capable. You won't get a builder increasing the retirement age to 68. There are plenty of office based jobs that someone in their 60's will be well capable of doing. Go down the Four Courts and there are plenty of barristers in the 70's working away.

And yes, it is 100% a sweeping generalisation.


Steven
www.bluewaterfp.ie

 

[Purple]

My reading is different and it is to do with when the OAP is payable. A standard contract of employment will always state the retirement age for employees. If there is a pension scheme, the scheme will have to state the normal retirement age.

Who determines the retirement age is up to the employer. As daddyman stated, it will depend on the employee being physically capable. You won't get a builder increasing the retirement age to 68. There are plenty of office based jobs that someone in their 60's will be well capable of doing. Go down the Four Courts and there are plenty of barristers in the 70's working away.

And yes, it is 100% a sweeping generalisation.


Steven
www.bluewaterfp.ie

OK, but if it's not that way how would you address the issue of retirement?

 

[Steven Barrett]

OK, but if it's not that way how would you address the issue of retirement?

Standard Life carried out research recently and stated that the average pension pays just €3,000 a year. Throw in the OAP and you have an income of €15,000 a year. Is that the kind of income you want to live on for 30+ years?

It is time for the government to stop flaffing about and introduce mandatory pensions. None of this opt out stuff, everyone should have their own private pension plan.

They also need to ring fence a fund to pay for the OAP. The raiding of the Pension Reserve Fund was a disgrace, as was bringing DB pension schemes that were privately run into the public service pension fold. A fund has to be grown so that it can service future contributions. But with politics being such a short term game and the constant demand for additional funding from all departments, I can't see this government doing anything. What will win them more votes, adding 1% tax to pay for your pension in 20 years time or a 1% tax cut today?

While the government continue to fail us in this area, you just have to look after yourself and have a private pension plan (it doesn't have to be a pension per se, it can be property or other investments. Just have a source of income in retirement).

Steven
www.bluewaterfp.ie

 

[Purple]

I'm 43. I have no expectation that I'll receive a state pension when I retire at 68 as I think the State will have run out of money by then.