In its response to the Report of the Commission on Pensions, the Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands has recommended that Ireland’s State Pension age remain at 66 years. This rejects the proposal to increase the qualifying age from the current 66 years by three months every year from 2028, reaching 67 in 2031, put forward by the Commission on Pensions last year. To fund this, the Committee recommends an examination of potential changes to Employers’ PRSI contribution rates be carried out by the Commission on Welfare and Taxation.
Chartered Accountants Ireland issued a statement following the response this week, welcoming the recommendation to leave the State Pension age unchanged at 66 years; an option supported by over 60 percent of members when surveyed. The Institute recognises the shortfall in funding the State Pension long-term needs to be addressed, however believes this heavy burden should not fall on employers.
Among the 13 proposals put forward, the Committee also recommends banning the mandatory retirement age for both new and existing employment contracts.
The Institute’s response highlights that employers are already paying high salaries to compensate workers for high personal tax rates and asking employers to pay increased rates of PRSI cannot be a long-term solution.
The Committee also recommended that funding auto-enrolment should not be prioritised over retaining the current State Pension age. However, Chartered Accountants Ireland believes reforms to enhance the sustainability of the State Pension cannot take place without parallel reforms to increase private pension coverage in Ireland to enable workers to avoid living their retirement in poverty.
Calls for coherent Government policy were also made to enable workers to adequately plan for their retirement.
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