Redefining retirement: Key changes under the Employment (Contractual Retirement Ages) Bill 2025

At a glance

• As of 1 July 2025, the Employment (Contractual Retirement Ages) Bill 2025 (Bill) has progressed to the Committee Stage in the Dáil.
• Employees will have the right to refuse to retire at a contractual age below the State Pension Age, provided they notify their employer in writing within a specific timeframe.
• Employers will have to respond within one month, objectively justifying the retirement age as serving a legitimate aim through appropriate and necessary means.
• Failure of an employer to respond may result in criminal penalties and prevent forced retirement; employees may also seek compensation through the Workplace Relations Commission (WRC).
• The Bill applies to employees up to age 66, but future legislation may extend this.

Following our previous update, as of 1 July 2025, the Employment (Contractual Retirement Ages) Bill 2025 has progressed to the Committee Stage in the Dáil.

Once enacted, the legislation will allow employees who are subject to contractual retirement ages below the State Pension Age (currently 66) to notify their employer that they do not consent to retirement at that age. This represents a major shift in employment law, potentially limiting the ability of employers to enforce mandatory retirement unless it can be objectively justified.

Key provisions of the Bill

• Notification procedure: Employees must notify their employer in writing of their intention to remain in employment. This must be done no less than three months and no more than one year before reaching the contractual retirement age. If the employment contract specifies a longer notice period, the employee must adhere to that period, or six months, whichever is shorter.
• Employer obligations: Employers must respond within one month of receiving the notification. The response must reasonably and objectively justify the mandatory retirement age as serving a legitimate aim, and the means of achieving that aim must be appropriate and necessary.
• Legal consequences:
• Complaints can be referred to the WRC, which may award compensation of up to two years’ gross remuneration or EUR40,000, whichever is greater.
• If an employer fails to provide a reasoned written reply, the employee cannot be forced to retire until they reach the State Pension Age.
• Failure to respond without reasonable cause will constitute a criminal offence, punishable by a fine of up to EUR5,000, imprisonment for up to 12 months, or both.
• Employees will be protected from penalisation for exercising their rights under the legislation.

Context and rationale

The Bill implements recommendations from the 2021 Report of the Commission on Pensions, which highlighted the growing unsustainability of the State Pension system due to increasing life expectancy and declining birth rates. It also aligns with a 2024 Supreme Court ruling, which confirmed that while employers can set a mandatory retirement age, it must be justified by a legitimate aim such as intergenerational fairness, health and safety, or workforce planning.

Scope and limitations

The legislation will apply only to employees up to the age of 66. However, there is nothing to prevent a future Oireachtas from increasing this age limit further (eg to 70). The WRC is also expected to revise its Code of Practice on Longer Working, which may further influence how employers manage retirement policies.

Looking ahead

There is growing momentum toward abolishing mandatory retirement ages altogether. In 2024, the Joint Committee on Enterprise, Trade and Employment recommended such a move, following the example of several EU and international jurisdictions. With advances in medical science and increasing longevity, the traditional concept of retirement is being redefined.

What employers should do now

Employers are advised to:

• Review their current contractual retirement ages.
• Assess whether these are objectively and reasonably justifiable.
• Prepare to comply with the notification and response procedures outlined in the Bill.

We will continue to monitor developments as the Bill progresses through the legislative process.