Olivia Mitchell (Dublin South, Fine Gael)
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Question 215: To ask the Minister for Social Protection in view of plans to raise the retirement age for State employees, if private sector workers, who are obliged to retire at age 65, will continue to be eligible for the State pension from their retirement age or will they have to wait until the older retirement age applicable to public servants; and if she will make a statement on the matter. [25650/11]

Joan Burton (Dublin West, Labour)
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Public sector pension rules, including in relation to retirement age, are a matter for my colleague the Minister for Public Expenditure and Reform. My Department is responsible for State pensions and I will outline the position in this regard. State pension (transition) (SPT) is currently paid to people aged 65 who have a minimum yearly average of 24 social insurance contributions and who have retired from work. Currently it ceases at age 66 when the claimant transfers to State pension (contributory) (SPC).

As a result of legislation introduced this year, State pension age will be increased gradually to 68 years. This will begin in 2014 with the abolition of SPT and the standardisation of State pension age at 66. State pension age will be increased to 67 years in 2021 and to 68 in 2028. It is worth noting that, until the early 1970s, the qualifying age for State pension (contributory) was 70 years of age. By gradually increasing the qualifying age for State pension, people will be further encouraged to remain in employment beyond 65 years of age.

The Quarterly National Household Survey Q4 2010 showed that the numbers currently at work drop dramatically at 65 years of age. While 77.2 per cent of people aged 45-54 years are in employment, this drops to 64.3 per cent for 55-64 year-olds and to just 8.7 per cent for people aged 65 years or older. It is clear, therefore, that the challenges facing the Irish pension system are significant. Increases in life expectancy mean that more people are living to pension age and living longer in retirement. While this is to be welcomed, this has obvious and significant implications in relation to the future costs of State pension provision. The fundamental principle that people need to participate in the workforce for longer needs to be emphasised and they need to contribute more towards their pensions if they are to achieve the income they expect or would like to have in retirement.

People who have retired before State pension age may be entitled to apply for another social welfare payment, as is the current position.