Starting June 29th, employees in Ireland with contractual retirement ages below 66 gain the legal right to request an extra year of employment, according to the Department of Enterprise, Tourism and Employment. The Employment (Contractual Retirement Ages) Act 2025 mandates that employers provide a reasoned response to such requests or face fines up to €5,000. This shift aims to bridge the gap for workers forced out at 65 before they qualify for the State pension.
How the new retirement legislation works
The Act applies specifically to private contracts that mandate retirement before the State pension age of 66. Under the new rules, workers must notify their employers of their intention to continue working at least three months—but no more than one year—before their scheduled retirement date. The Department of Enterprise, Tourism and Employment confirms that while employers must provide a reasoned response to these requests, the right to stay is not absolute. Organizations may still enforce retirement policies if they can demonstrate they are working to achieve legitimate organizational aims.
Why the shift in retirement age matters
The legislation addresses a financial “cliff edge” where workers face a loss of income between their mandatory retirement and their eligibility for the State pension. According to the Irish Congress of Trade Unions (Ictu), there is a growing appetite among the workforce to stay active beyond the traditional age of 65. Ictu general secretary Owen Reidy states that limiting mandatory retirement is essential for a tight labor market and the long-term sustainability of public finances. By allowing workers to remain, the policy recognizes that individual capacity varies, moving away from the “blunt instrument” of a universal age limit.
Comparison: Mandatory retirement vs. flexible aging
The 2025 Act represents a significant departure from previous norms, though it maintains existing protections. The table below outlines how these rules interact with current labor laws:
| Policy Area | Status |
|---|---|
| Right to request extension | Mandatory for contracts under 66 |
| Employer response | Must be reasoned; failure risks €5,000 fine |
| Age discrimination | Existing Employment Equality Acts still apply |
Frequently Asked Questions
Does this apply to public sector workers?
No. The legislation does not affect roles where the retirement age is already set by law, such as the Defence Forces or An Garda Síochána. Many public sector roles already have retirement ages of 70, which remain unchanged.
Is my employer forced to keep me on?
Not automatically. Employers can deny a request if they can prove the retirement policy serves a legitimate aim for the organization. However, they must provide a formal, reasoned explanation for their decision.
What happens if my employer ignores my request?
Employers who fail to provide a reasoned response to an employee’s request to stay on face potential fines of up to €5,000 under the new code of practice.
Are you approaching retirement age and considering staying on? Share your thoughts in the comments section below or subscribe to our newsletter for updates on labor law developments.