Ireland's Retirement Age Reform: What the Contractual Retirement Ages Act Means for Employers

For years, a persistent inconsistency sat at the heart of Irish employment and social welfare law: many employment contracts set a compulsory retirement age of 65, while the State Pension age — the point at which a person can begin drawing the State Pension — sits higher, leaving a gap during which a retired employee may have no employment income and has not yet reached pension eligibility. The Employment (Contractual Retirement Ages) Act 2025 addresses this directly, giving employees a statutory mechanism to remain in employment beyond a contractual retirement age, up to State Pension age, if they choose to.

This guide explains what the Act changes, why it was introduced, and what employers need to do as the accompanying Code of Practice is finalised.

The gap the Act is designed to close

Compulsory retirement clauses fixing an age below the State Pension age have been common in Irish employment contracts, particularly in sectors with long-standing traditional retirement norms. Where an employee is compelled to retire at, for example, 65 but does not qualify for the State Pension until a later age, the result is a period without either employment income or pension income — a gap that can create genuine financial hardship, particularly for employees without significant private pension provision.

The Act does not abolish contractual retirement ages outright, but it gives employees the right to request to continue working past the contractual retirement age set in their contract, up to State Pension age, addressing the income gap without requiring employers to remove retirement age clauses from contracts altogether.

How the right works

Under the Act, an employee approaching their contractual retirement age can notify their employer that they wish to continue working beyond it, up to State Pension age. Employers are required to engage with this request rather than simply enforcing the existing contractual retirement age automatically, and the detailed procedural requirements — including notice periods, the form the request should take, and the employer's obligations in responding — are being set out in an accompanying Code of Practice, which was still pending as the legislation moved toward implementation.

Employers should treat the pending Code of Practice as the source of the operational detail they will need to build compliant internal processes, and should not assume existing informal approaches to retirement-age flexibility will automatically satisfy the new statutory framework once it is finalised.

What employers need to prepare

• Review contractual retirement age clauses. Identify where contracts specify a retirement age below the State Pension age, since these are the contracts directly affected by the new right to request continued employment.
• Build a request-handling process. HR teams need a clear, documented process for receiving and responding to requests to work beyond the contractual retirement age, ready to align with the Code of Practice once it is published in final form.
• Train managers on the new right. Line managers approaching an employee's contractual retirement date need to understand that a request to continue working is now a statutory entitlement to engage with, not a discretionary favour to be granted or refused informally.
• Coordinate with pension and workforce planning. Employees choosing to work beyond the previous contractual retirement age affects succession planning, pension scheme interactions, and the auto-enrolment considerations covered in our guide to Ireland's My Future Fund auto-enrolment scheme, since an employee working longer may have different pension participation needs than one retiring at the previous contractual age.

Employers should also consider how this interacts with age-related aspects of equality and diversity practice, since decisions around requests to extend employment need to be handled consistently and free from age-based assumptions that could otherwise raise discrimination concerns.

Frequently asked questions

Does the Act abolish compulsory retirement ages in Ireland?

No — it does not remove the ability of employers to set a contractual retirement age, but it gives employees a statutory right to request to continue working beyond that age, up to State Pension age.

Is the employer obliged to grant every request to continue working?

The Act requires employers to engage properly with such requests through a defined process; the detailed grounds on which a request can be managed or declined are set out in the accompanying Code of Practice, which employers should monitor closely as it is finalised.

Does this change apply retroactively to employees who have already retired?

The Act addresses the right to request continued employment before a contractual retirement date is reached; employees who have already retired under a previous contractual arrangement are not the primary focus of this forward-looking entitlement.

The Contractual Retirement Ages Act closes a real and long-recognised gap between employment contracts and State Pension eligibility, and employers should use the period before the Code of Practice is finalised to review retirement age clauses and prepare a proper request-handling process rather than waiting until the first request arrives. Learnsignal's CPD courses cover this and the wider set of Irish employment law developments through 2026.