Pension age set for 68 in €1.5bn cuts
WORKERS are facing the prospect of having to delay retirement until long after the age of 65.
Plans are under way to increase the pension age, affecting both the public and private sectors as part of a long-awaited pensions policy framework about to be launched by the Government.
And before it is unveiled, Bank of Ireland (BoI) will be the first major employer to consider forcing staff to work longer before qualifying for a full pension.
It is to tell employees tomorrow that it is considering raising its retirement age to 68 to make up for a €1.5bn shortfall in its pension fund.
The Government's retirement age proposals will be published later this week. Its National Pensions Framework document will detail how the raised age of retirement will affect long-serving staff compared with newer recruits.
The new pensions arrangements will give different retirement ages depending on an employee's level of pension contributions, and how close they are to retirement.
The pensions framework will be launched by Minister for Social and Family Affairs, Mary Hanafin, on Wednesday.
Most workers in occupational pension schemes are able to retire at 65, while the State pension is paid from the age of 66.
Last October, the Minister warned: "Certainly, an increase in retirement age is an option we must consider."
The Government has already said in the December 2009 Budget that public servants will no longer qualify for a full pension until they are 66. New recruits to the public sector will learn the details of their pension scheme later in the year.
The Department of Finance indicated in talks with unions that new entrants to the public sector could have their new retirement age set at 70.
An Bord Snip had flagged that raising retirement ages was a major potential saving.
Chairman Colm McCarthy has said a sharp increase in life expectancy was becoming "hugely costly" to the Exchequer and causing "huge problems" for state pension schemes.
"If people used to snuff it at 70, but have decided to snuff it at 85 and 90, well then something's got to give," he said.