Stay­ing power

Work­ing be­yond re­tire­ment age

Irish Examiner - Feelgood - - Front Page -

WE need look no fur­ther than our pres­i­dent, Michael D Hig­gins, to find a vi­brant ex­am­ple of an older per­son work­ing be­yond the tra­di­tional re­tire­ment age of 65 in Ire­land.

At age 70, five years af­ter the ma­jor­ity of em­ploy­ees leave the work­force, he en­tered the pres­i­den­tial race, won it, and has filled that po­si­tion with en­ergy and verve.

Now it is widely re­ported that he is go­ing to go for a sec­ond term, a sug­ges­tion he has not shot down.

When he took up of­fice in 2011, Hig­gins, who will be 77 in a few weeks, said he would not run for a sec­ond term. But it looks like he might have changed his mind.

“By sum­mer, every­one will know,” he told RTÉ pre­sen­ter Ryan Tubridy, when he was in­ter­viewed by him at Áras an Uachtaráin for his morn­ing ra­dio pro­gramme ear­lier this month.

It is very clear that he has rev­elled in his role, not least be­cause it feeds his cu­ri­ous philo­soph­i­cal mind and his love of so­cial con­tact.

“I meet all sorts of peo­ple when I’m out and I en­joy that,” he told Tubridy.

Although the free­dom to work longer in our later decades is gen­er­ally a choice left to the self-em­ployed, due to manda­tory re­tire­ment cut-off points that ap­ply to em­ploy­ees, the land­scape is cer­tainly chang­ing as the eco­nomic re­al­ity of an age­ing pop­u­la­tion, liv­ing far longer than our par­ents did, re­veals it­self.

In last year’s cen­sus, for in­stance, the over-65 age group saw the largest in­crease in pop­u­la­tion since 2011, ris­ing by 102,174 to 637,567, a hike of 19.1%.

Ex­tended work­ing life poli­cies in Ire­land have al­ready in­cluded the rais­ing of the state pen­sion age to 66, and to 67 in 2021, and 68 in 2028.

Re­port­edly 5,000 peo­ple in 2017 who were forced out of the work­force at 65 years of age, had to bridge the in­come gap by sign­ing on for the dole, un­til they while en­ti­tled to a State pen­sion a year later.

Un­less there are changes around manda­tory re­tire­ment lim­its, the prob­lem will be fur­ther ag­gra­vated as the two fur­ther pen­sion age in­creases in 2021 and 2028 cre­ate an even big­ger fi­nan­cial chasm for em­ploy­ees to fill.

This so-called pen­sions time bomb was ad­dressed in a ma­jor re­port from the OECD (Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment) which found that the av­er­age Ir­ish worker’s pen­sion is worth just 34% of their earn­ings be­cause of the lack of pro­vi­sion be­yond the ba­sic State pen­sion.

It found two-thirds of pri­vate sec­tor work­ers have no oc­cu­pa­tional pen­sion to sup­ple­ment their State pen­sion and many will face hard­ship in old age.

To ad­dress this, a pen­sion re­form plan that will see the in­tro­duc­tion of a manda­tory “auto-en­rol­ment” sys­tem within years, is be­ing planned by the Govern­ment. It also in­cludes a re­view of the State pen­sion which means that em­ploy­ees will get out of their pen­sion what they put in, in the form of PRSI con­tri­bu­tions. It is ex­pected that 10 years of PRSI con­tri­bu­tions will qual­ify for the min­i­mum pen­sion, and 30 years for the full pen­sion.

Late last year, Min­is­ter for Fi­nance Paschal Dono­hue got cabi­net ap­proval to raise the com­pul­sory re­tire­ment age from 65 to 70 for the ma­jor­ity of pub­lic sec­tor work­ers if they choose to do so, though he stressed that they will still be free to re­tire at the min­i­mum re­tire­ment age if they so wish.

The is­sue of longevity, pen­sions and in­come for older peo­ple is a hot topic and at the Cit­i­zen’s As­sem­bly last year it was heard that, as things stand, the ma­jor­ity of peo­ple will rely on the State pen­sion when they re­tire and that — apart from the rich­est 30% of pen­sion­ers — most of their in­come will come from so­cial wel­fare pay­ments.

But should peo­ple have a choice re­gard­ing manda­tory re­tire­ment age?

Ita Man­gan, who ad­dressed the Cit­i­zens As­sem­bly, and is chair of Age & Op­por­tu­nity, a na­tional or­gan­i­sa­tion that en­cour­ages older peo­ple to reach their full po­ten­tial, says yes.

“I think a lot of peo­ple would not choose to work be­yond manda­tory re­tire­ment age; the peo­ple who would, are in gen­eral those who get a lot of work sat­is­fac­tion,” she says.

“There are a lot of peo­ple who can’t wait to re­tire and they shouldn’t be dis­ad­van­taged, in my view, in that ex­pec­ta­tion and should get a pen­sion at that stage. But I do think the choice should be there to make it avail­able for peo­ple to stay on.”

One of the cur­rent ob­sta­cles to peo­ple re­main­ing in the work­force, how­ever, is an at­ti­tude of re­sis­tance by “the prophets of doom”, she says. “Some peo­ple are con­cerned that if older peo­ple stay on in the work­force, it would re­duce the job out­lets for younger peo­ple, but that ar­gu­ment, used against the rights of women 40 years ago, didn’t hold up then. And equal pay and op­por­tu­ni­ties were in­tro­duced and the sky didn’t fall in. There is no rea­son it will if we do some­thing sim­i­lar for older peo­ple.”

Man­gan, who is 66 her­self and has spe­cialised in older peo­ple’s is­sues all her ca­reer, says she won’t be re­tir­ing any time soon. “I am self-em­ployed and have a choice. I don’t have a manda­tory re­tire­ment age, so while I re­main healthy I have no no­tion of not work- ing. I’m in a for­tu­nate po­si­tion I know, that I don’t have to work as much as I choose to work, but I recog­nise that many peo­ple aren’t in that po­si­tion.”

But the ex­ten­sion of the manda­tory pen­sion age is clearly on the hori­zon: “I think it will have to hap­pen — putting it up to 70, or not hav­ing one at all — be­cause peo­ple are liv­ing longer and will need a longer in­come in re­tire­ment and not be­cause any­one, in par­tic­u­lar, will want to but be­cause the fi­nan­cial sit­u­a­tion will re­quire them to.”

How­ever a one-pol­icy-fit­sall ap­proach to that ex­ten­sion is not the so­lu­tion, says Dr Áine Ní Léime of the Ir­ish Cen­tre for So­cial Geron­tol­ogy at NUIG.

In a re­cently con­ducted three-year, cross-na­tional study called GENDOWL (Gender Older Work­ers and the Life­course), funded by the Euro­pean Union, she in­ter­viewed 60 older peo­ple from dif­fer­ent oc­cu­pa­tions in the US and the same num­ber in Ire­land, to get their views on ex­tended work­ing life, specif­i­cally the in­crease in the state pen­sion age.

“The key mes­sage that came from it was that every­one wanted choice about work­ing longer,” she says.

“Some pointed out that they had al­ready worked for up to 50 years at age 66 and that was long enough.

“Oth­ers felt that they would be un­able to con­tinue to work at phys­i­cally de­mand­ing jobs past tra­di­tional re­tire­ment age and oth­ers stated they wanted to en­joy some healthy years in their re­tire­ment.”

In­stead of in­tro­duc­ing an across the board manda­tory age, she sug­gests that it could be mod­i­fied for some pro­fes­sions, as is the case al­ready for the gar­daí, fire­fight­ers and the De­fence Forces who have pro­vi­sions for much ear­lier re­tire­ment.

The min­i­mum re­tire­ment age is 55 for peo­ple who joined the gar­daí and Fire Ser­vice af­ter April 1, 2004, while the com­pul­sory re­tire­ment age for gar­daí is 60.

Mean­while, Maeve McEl­wee, IBEC di­rec­tor of em­ployer re­la­tions, says there are many pri­vate em­ploy­ers who would wish to hold on to older more ex­pe­ri­enced work­ers: “Many of them see the ad­van­tage of keep­ing peo­ple work­ing for longer and I think most peo­ple re- cog­nise that it’s an eco­nomic in­evitabil­ity,” she says.

“We will be fit­ter and health­ier and more ca­pa­ble of stay­ing in the work­place longer; we can still have that re­tire­ment time but just in a dif­fer­ent pro­por­tion — not stretch­ing it out as long.”

McEl­wee says there have been talks with all the rel­e­vant govern­ment de­part­ments to see what can be done about ad­dress­ing the re­tire­ment age hike.

“The key is­sue for em­ploy­ers is the abil­ity to have a con­trac­tual re­tire­ment age and I don’t think you will find many em­ploy­ers who will say ‘we are ab­so­lutely wed­ded to it be­ing 65’. So if it were to move to 68, I think many em­ploy­ers would wel­come that op­por­tu­nity. It’s about hav­ing the cer­tainty of say­ing ‘when you reach a cer­tain age, you re­tire and there is a process there to see that re­tire­ment through’.”

So should there be a choice around manda­tory pen­sion age?

“There has to be a rea­son­able jus­ti­fi­ca­tion as to why any pen­sion age is be­ing set. I think you would have to ask ‘phys­i­cally how de­mand­ing is the work? In­tel­lec­tu­ally, how de­mand­ing is the work? And what are the av­er­age ca­pa­bil­i­ties of the av­er­age per­son in these roles? And look­ing at it from that point of view, while meet­ing all the same re­quire­ments of the Euro­pean leg­is­la­tion,” she adds.

The re­al­ity, how­ever, is that peo­ple cur­rently re­tir­ing at 65 are reg­u­larly liv­ing well into their 80s, thanks to the med­i­cal, tech­no­log­i­cal and lifestyle ad­vances of our time — com­pared to a life­span of 70, when that re­tire­ment age was set in the early 20th cen­tury.

Ac­cord­ing to the United Na­tions World Health Age­ing re­port in 2015, pop­u­la­tion age­ing is set to be­come one of the most sig­nif­i­cant so­cial trans­for­ma­tions of the 21st cen­tury af­fect­ing em­ploy­ment, hous­ing, health­care, in­fra­struc­ture and so­cial pro­tec­tion and it urges gov­ern­ments to de­sign in­no­va­tive poli­cies to cope.

It looks like this de­mo­graphic tsunami is go­ing to push the manda­tory pen­sion age is­sue up the agenda sooner rather than later — whether we have a right to choose or not.

OP­TIONS OPEN: Pres­i­dent Michael D Hig­gins will soon be 77 and may yet run for a sec­ond term.

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