Minister Dillion confirms new legislation allows workers to stay employed until pension age
The measure is designed to address a long-standing issue where employees were required to retire before they could access the State Pension, leaving some without income during that period.
Minister of State for Employment, Alan Dillon, has confirmed that the Employment (Contractual Retirement Ages) Act 2025 will commence on June 29, 2026, introducing a significant change for employees approaching retirement.
The new law will allow eligible workers whose contracts require them to retire at 65 or earlier to choose to stay in their job until age 66, if they wish.
The measure is designed to address a long-standing issue where employees were required to retire before they could access the State Pension, leaving some without income during that period.
The reform follows recommendations from the Pensions Commission and is part of the Government’s broader efforts to improve financial security and flexibility for older workers.
Minister Dillon said this is a practical and important reform that gives people greater control over when they retire.
“No one is being required to work longer, but those who want or need to continue working up to the State Pension age will now have that option,” he said.
Under the new system, employees who wish to remain in work must notify their employer in writing in advance of their contractual retirement date.
Employers are required to consider such requests and can only refuse them where there is a clear and justified reason, such as in roles involving safety or physical demands.
Minister Dillon has also signed this updated Code of Practice into law, providing clear and practical guidance on how the new right will operate in workplaces.
The Mayo-based TD said that for too many workers, being required to retire at 65 created a gap before they could access their pension.
“This legislation directly addresses that issue by giving people the option to remain in employment and maintain their income during that important transition.”
He further emphasised that existing employment equality protections will continue to apply, including for workers aged 66 and over or in roles where retirement ages are set in law.
“This is a balanced and fair approach that supports workers, recognises the realities of modern working life, and gives employers clarity on how to manage longer working,” he further stated.
Minister Dillon stated he would encourage both employees and employers to familiarise themselves with the WRC Code of Practice so they can fully understand how this new right works in practice.