Mr. Declan Lawlor:

Over the past two years or so, one of the issues that came to the fore at our courses has been the gap between the age at which most people retire, which is still 65, and the age at which they become entitled to the State retirement pension. Currently, in the private sector at least, most employees who are members of an occupational pension scheme are required to retire on the scheme's nominated retirement age, which is typically still 65. However, A-class PRSI contributors only become entitled to the State pension at the age of 66. There have been recommendations in the past to increase that retirement age to 67 and further, which may or may not go ahead.

Currently, employees can request an extension of their contract of employment but effectively the employer is not obliged to agree to such an extension. If forced to retire at the age of 65, the employee can apply for the benefit payment for 65-year-olds. However, there are two issues with this particular benefit. First, the amount of payment is equivalent to jobseeker's benefit, which is approximately €35 per week less than the State pension. In the case of a couple, if one partner is a dependent spouse, the difference between the two payments is about €140 per week because the additional payment for a dependent spouse under jobseeker's benefit is much less than it is under the State retirement pension.

Private sector pension schemes do not typically offer the so-called supplementary pension, a common feature in public sector schemes. As such, for lower paid employees the lower payment for 12 months can represent a significant financial challenge. For employees who are not members of an occupational pension scheme, the income shortfall, even for 12 months, can be even more challenging.

The second issue is that the qualification rules for retirement in relation to PRSI contributions conditions are overcomplicated, particularly for employees who retire prior to the age of 65. This is certainly a source of confusion for many of the individuals who attend our courses. It is not simply the case that everybody will get the benefit payment for 65-year-olds when they reach the age of 65. The proposed changes, whereby employees will have the option to insist on remaining in employment until reaching the qualifying age for the State pension, will certainly be welcomed by many. Based on our experience, we expect that some employees will want to take advantage of such a change, while others may still opt to retire at the nominated retirement age, even if it involves accepting a lower payment for 12 months. Under this legislation, at least the option will be with the employee.

As we point out on our courses, one of the more significant changes that has happened to the current generation of retirees is the increase in life expectancy over the past couple of decades. The average life expectancy for a male retiring at 65 is now about 20 years and for women, it is about 23 years. This represents an increase of roughly 60% over the past 40 to 50 years. Combined with improved health in retirement, this means that most retirees have a more positive outlook as they face into their retirement years. However, being financially secure is a critical element of retirement planning. Clarity around the integration of employment regulations and social welfare benefits is therefore essential. We carry out regular surveys, as referred to by Ms Farrell, and in one of our recent surveys some 68% of female respondents said they would be heavily reliant on the State pension when they retire, as opposed to 32% of male respondents. Some 60% of female respondents indicated they would consider working past the age of 65 compared with 40% of male respondents.

Retirement is a significant milestone in a person's working life. Findings from the survey demonstrate there is a pension disparity between men and women at retirement. The Retirement Planning Council of Ireland therefore supports the proposed changes and looks forward to future changes and social innovations that will help people to remain healthy and productive over the course of longer lives.