Implications of new law on age 65 retirement

[Zeus2020]

Hi just wondering what constitutes part time.
I work 60% of a 37.5 week now, but have worked full time as well for long periods in the last 30 years
so wilI I not qualify for this new payment does not seem fair.

 

[deirdremaryegan]

I do have paid contributions of class S from my small private pension...and I was signing on every year but not claiming unemployment benefits. I definitely don't have investment or rental income

 

[ClubMan]

Is there any plans for the legislation to ban people being forced to retire at 66 being brought into law?

Any use?

Unions welcome renewed commitment to ban forced retirement

The Employment (Contractual Retirement Ages) Bill is included in the Government legislative programme, which was published yesterday.

www.ictu.ie

My contract of employment also says 65 but my pension assumes I will be getting the contributory old age pension, which of course won’t kick in until 66.

But you'd probably qualify for the BP65?

Payment for people who retire at 65

If you retire at 65, you may qualify for a benefit payment until you reach 66. The payment is similar to Jobseeker’s Benefit, but you don’t need to be looking for work or sign on at your local Intreo centre.

www.citizensinformation.ie

 

[S class]

Because I paid prsi at class S over the years on my private pension would I be entitled to claim the state payment for 65 year olds because you need the weeks of paid contributions ?

No the class S won't allow you to qualify.

Because you have continued to sign on for Jobseekers credits you have a chance to qualify based on these credits.
If you have a minimum of 39 credits in the calender year of your 63rd birthday, you will qualify if you get class A employment for 13 weeks in any calendar year up to age 65.

Click on this post for information on employment.

Post in thread 'PRSI and planning retirement'

Key Post - PRSI and planning retirement

Is there any point several years from applying for contributory pension in getting homemaker credits and years spent in the US addressed on my and my wife’s statements? Or is that something we deal with on application? For the US years I believe our social security numbers and names of...

www.askaboutmoney.com

 

[S class]

Hi just wondering what constitutes part time.

The qualification rules for both the existing Jobseekers Benefit and the new Pay related scheme are based on Prsi contributions.
You could work for 1 hour per week and get the same class A contribution for that week as a person working 40 hours per week.

If you have the necessary pattern of Prsi contributions it doesn't matter how many hours per week you worked.

If your weekly earnings are at a low level you might not qualify for the full rate of Pay Related Jobseekers Benefit.

 

[mmclo]

Is there any plans for the legislation to ban people being forced to retire at 66 being brought into law?

Suspect it will eventually be found to be unconstitutional, at least without some occupational health test

 

[Clamball]

It looks like the bill will be approved by cabinet today, where those with a contract of employment saying 65 is the age to retire will have that extended to 66 when the old age pension kicks in.

I am not sure how long after this step it takes for the legislation to be enacted?

 

[Annieindublin]

That will be interesting. Legislation can be swift or painfully slow.

I can see a few situations where senior staff are nearing retirement and successors are lined up and waiting in the private sector anyway. The heirs apparent might not be happy to wait an extra year or so. But from the state’s perspective having a lot of people forced to claim dole in some form or another is not ideal. But they knew that when they moved the pension age.

I didn’t pay much attention to what happened in thr UK when they moved the state pension age to 67. Did many people extend their working lives or sign on I wonder

 

[Dr Strangelove]

I am opposed to this state intervening for two reasons

1) employers and employees have voluntarily entered into contracts which state that 65 is the retirement age. I shoot the state to be overriding this? Employers and employees are perfectly able to come to another arrangement if they wish.

2) employers need at some point to be able to let an employee go. If they are employee of the year, there is nothing to stop them taking someone on a year to year basis.

There is an odd quirk where public servants hired between 2004 and 2013 have no set retirement age at all! Someone could have joined the civil service at age 50 and stay there until they are 90 to draw down their full pension. I think this will not be common, but there will be examples of people in their 80s turning up to work every day and it would be better for everyone (their employer, their colleagues, and themselves) if they had to retire.

 

[Annieindublin]

My pension scheme was funded on the basis that I would collect the state pension age 65. Should my employer be allowed make me leave then I need to get some income to cover that gap.

I may have voluntarily entered a contract at 21 based on retirement and state plus DB pension at 65. Now one of those has been removed by the state. Surely supporting me in a negotiation to stay on is the least they could do having removed one of the props for me in my retirement.

If left to individuals to negotiate many won’t be in a position to and they’ll be forced out and then what?

I am under no illusion that my company will pick and choose who they want to keep depending on politics, it’s not always about performance. This way at least they might have to pay people a lump sum rather than just cancelling their security card and showing them the door on their 65th birthday.

 

[misemoi]

Is it like the notice period - contract might say 4 weeks but if the min in law is 6 weeks for your service, the 6 weeks applies. So if the legislation passes, then where an employee wants to continue, the law overrides the employment contract and the employer cannot force them to retire at 65. Where they want to retire, they can but they will have to wait to claim their state pension.

Again I keep going back to the concept that the state pension should be a fraction of your retirement income, not the bulk as the value will erode over time. Not for retirements in the coming years I am sure, but as auto enrolment kicks off and people become more financially literate and proactive about planning etc then the sands will shift.

 

[Annieindublin]

At least this way those less able to negotiate might have more support.

Employee of the year is probably OK but what about the more vulnerable Jo Soap. The state has kinds left them out to dry by moving the pension age.

 

[BIG-notorious]

I'll start by saying that the idea of working past 66, voluntarily or by reason of financial need, basically horrifies me. Most of my financial planning is oriented around getting out the door at the earliest opportunity. There may be massively satisfying positions out there but most jobs I've done could be performed well by a decent robot. And while I've had respect for most of my colleagues over the years, the fact is that we're literally paid to interact and (with a very small number of exceptions) I can't wait to never see any of them ever again. Everyone should have something outside of work that makes them happy, and nobody should live to work.

employers need at some point to be able to let an employee go

Employers and employees are perfectly able to come to another arrangement if they wish.

The law in Europe generally recognises the massive power imbalance between employers and employees. Employees literally depend on their wage to keep a roof over their head and put food on the table. Without intervention you basically have employment at will, which sounds great right up to the point where you're the person being employed at will. Everyone is at the end of the day replaceable, and anyone who thinks otherwise is a delusional fool.

Again I keep going back to the concept that the state pension should be a fraction of your retirement income, not the bulk as the value will erode over time. Not for retirements in the coming years I am sure, but as auto enrolment kicks off and people become more financially literate and proactive about planning etc then the sands will shift.

100%. The State pension should be considered a bare minimum rather than the entire thing. But I think we're a long long way from the point where the COAP starts reducing in real terms.

• First of all, it'll take decades for Auto Enrolment to have any real effect in terms of supplementing the COAP.
• Second, the older people are the more likely they are to vote, and even slowing down the rate of increase of the the COAP will hurt a lot of people financially. Everyone hates losing what they have (or think they have) so that frog will have to be boiled very very slowly: the change to the total contributions approach is being phased in over 10 years and was flagged 6 years at least ahead of time. This is probably the most important point in my opinion: remember that the 2020 election was decided essentially over the proposed increase of the pension age in 2021, now delayed to 2035 at the earliest.

There's more than one way to skin a cat though, and there's an argument that private pensions act as de facto arms length sovereign wealth fund due to the taxes which will be taken from them when vested. I reckon (and my figures could be way out) that the tax, USC, & PRSI I pay in retirement will be maybe third of what I'll be getting in COAP. That's a big saving without the government having to touch the actual rate at which I'm receiving it.

The real challenge though is financially educating people. How many people leave secondary school with any real understanding of compounding and how to use Excel and some clue as to what stock markets and indices are? I did honour's maths & accounting for the Leaving and did business in college supplemented 15 years later by a masters in business and I graduated with the masters STILL having no understanding of any of those (edit- I mean compounding, indices and Excel; I had a reasonably good understanding of what I was actually taught!). In my mid 20s I just had a vague notion that setting up a pension would be a good idea.

• I doubt if I'm unique- this stuff should be part of the core curriculum all through secondary school but people are probably still learning about quadratic equations but skipping these kind of skills which will arguably help set them up for life.

 

[Annieindublin]

I’m sure my pension scheme is not the only one where the state contributory pension is factored in. And decades after it was established and the state changed the rules the scheme didn’t address this and work out a few funding requirement based on paying extra to everyone for that year.
Now maybe they should have but it’s probably too late now. It’s a small DB scheme so thr employer might be reluctant to open that can of worms,
So having some protection from dismissal if I don’t want to quit is a good security for me.

I would really prefer to finish at 65 but I’m not everyone and it may depend on my health and wealth at that point.

And a time machine to go shout at my 20 year old self isn’t an option

 

[misemoi]

I did honour's maths & accounting for the Leaving and did business in college supplemented 15 years later by a masters in business and I graduated with the masters STILL having no understanding of any of those (edit- I mean compounding, indices and Excel;

There is a vast difference between personal finance and all those things. Have a similar background, and I 100% learned more on here than anywhere else through the generosity of the contributors. I started with mortgages and now swiftly learning about pensions.

Perhaps having an inclination for numbers helps as in one can build and sense check own models but my experience with peers who don't have numerical leanings is that all of this is a mystery and as long as things are ticking away ok, they leave it be...even if it means they are financially worse off. So even if we did have a large education programme in schools, it might go the way that my forays into music and the arts did - something I vaguely recall doing and would love to be better at but was never a strength for me due to my aptitudes. There is merit in it but I am not sure it would change outcomes to a large degree.

 

[BIG-notorious]

So even if we did have a large education programme in schools, it might go the way that my forays into music and the arts did - something I vaguely recall doing and would love to be better at but was never a strength for me due to my aptitudes.

That's an awful comparison in fairness. In my life I've met more than a few artists & musicians and none were able to make even a short term career out of it unless you count the art teachers and the music teachers. I've met more people using their honour's maths in their non-teaching careers than I've ever met making a living from art or music. And far more people who first learned to cook or use a saw etc in the practical classes.

Few people will make a coin from their artistic or musical ability. Most people will work & reach retirement age.

 

[Annieindublin]

I find that just-in-time learning is most popular with adults. We will work at learning something when we need to.
So cooking when mammy isn’t around, employment T&C when they have a job, mortgage rates etc as needed… the problem is that you only focus on pensions when you are offered the opportunity to join one and that is usually a fairly brief consideration as your employer has one, you say how much and then grit your teeth and sign up.
You next revisit that when your retirement date is approaching and it’s rather late. If you are sensible you’ll look at contribution levels etc every year or so and hopefully increase them and maybe start reading the annual statements before your 45th birthday.

So I’m not sure a TY class on pensions would actually hit home.

My dad was a life long civil servant but his pleas to his kids to consider a state pensionable job were totally ignored. He’s 90+ and has a nice pension. His offspring not so well set up.


And my kids won’t listen to me I’m sure.

 

[BIG-notorious]

So I’m not sure a TY class on pensions would actually hit home.

I'm pretty sure it wouldn't, which is why I said:

this stuff should be part of the core curriculum all through secondary school

And my kids won’t listen to me I’m sure.

That's a bit defeatist!

We will work at learning something when we need to.
So cooking when mammy isn’t around, employment T&C when they have a job, mortgage rates etc as needed

We mostly learn the things that we learn (including how to learn) at a young age. Few people wait until their child is entering the Leaving Cert year to mention that going to college might be a good idea, for example. And so it is with finance and pensions: how we speak about these things shapes how young people think about them. If we DON'T speak about them they're probably going to learn that they should be ignored which is obviously the wrong lesson.

 

[Clamball]

Picking an age beyond which you cannot work is ageism. Some people want to retire at 50, others 70. Given our longer lifespan and better health, with less physically demanding jobs there should be no need to set a retirement age. Judges can work until 70, guards can retire after 30 years. It is all dependant on the role and the person.

When I started in my job with the 65 year retirement date I also started a DB pension. That was removed by my company as many other employers did. My pension will be lower as a result of that change so why penalise me a second time by insisting I retire at 65 when I won’t get the state pension until 66. My DB scheme assumes I will be entitled to the full state pension at 65 which is no longer the case, and maybe never was as I may not reach 2080 credits by my 65th birthday.

Ageism should not be allowed in the workplace, whether you are 18 or 65.

 

[Annieindublin]

lol my kids are well into adulthood. And no they don’t have well funded pensions appropriate to their ages. Extended education, changing careers, travel, covid… lots of reasons.


My experience in teaching adults is that they learn when they need the information or skills.

This might not be universal I’ve only been involved in it for 25 years so I don’t speak for every adult who needs information or skills. The people I deal with are generally already well educated and busy and will seeks information and skills when they need them and not until then,

I do agree that financial skills should be taught throughout school, I asked a few teachers about it and they reckoned TY was the only option as the syllabus is already crammed. There is a business and accounting module taught in many TY classes now, Bootcamp, and I think it will help financial literacy a lot. It’s not focussed on personal finance and pensions but the skills are transferable IMO