Peter Mathews (Dublin South, Fine Gael)
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Question 237: To ask the Minister for Social Protection her views regarding the increase in retirement age from 65 to 68 (details supplied); and if she will make a statement on the matter. [28290/11]

Joan Burton (Dublin West, Labour)
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The responsibility for setting retirement age in employment in the private sector rests with the individual employer who, in the main, sets retirement age under the contract of employment. Overall State responsibility for employment matters is held by my colleague, Mr Richard Bruton, the Minister for Jobs, Enterprise and Innovation.

My Department is working with the relevant agencies of State who have a role to play in identifying and breaking down barriers to remaining in work past the age of 65. The continued participation of older people in the labour market must be encouraged and facilitated to meet the challenge of an ageing society. Employees and employers need to be persuaded to change their attitudes to working longer. In the workplace, employers should try to retain older employees and create working conditions which make working longer both attractive and possible for the older worker. Where this is not possible and people leave paid employment before State pension age, they may be entitled to apply for another social welfare payment until they become eligible for a State pension. Means testing may or may not apply, depending on the scheme applied for.

The standardisation of State pension age at 66 in 2014 and the abolition of State pension (transition) removes the retirement condition associated with State pension (transition) which acts as an incentive to leave the workforce and has been widely criticised as a barrier to older people remaining in employment. There is no retirement condition attached to the State pension (contributory) which is currently payable from age 66.

Opportunities for older people to participate in education, employment and other aspects of economic and social life must be maximised. For the future, arrangements are being examined which would enable people to postpone receipt of State pension and receive an actuarially increased pension at a later date. In addition, changes are also being considered which would allow people with a shortfall in their PRSI contribution record at pension age to continue to make contributions beyond State pension age, if they continue in employment or self-employment.

Raising State pension is a necessary step in ensuring the sustainability of pensions into the future. There is an important and significant policy background to these changes which is that with increases in life expectancy, more people are living to pension age and living longer in retirement. This has obvious and significant implications in relation to the future costs of State pension provision. The fundamental principle involved here is that people need to participate in the workforce for longer 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.