Ireland is set to introduce a significant change to how employers manage mandatory retirement ages. The Employment (Contractual Retirement Ages) Act 2025, enacted in December 2025, creates a new statutory framework allowing employees to notify their employer that they do not consent to retire at their contractual retirement age and instead wish to work until age 66 (the current State pension age).
As of now (February 2026), the Act has not yet commenced and will come into force following a commencement order and publication of a supporting Code of Practice. However, employers should act now to prepare.
This reform reflects wider policy developments in Ireland, including increased longevity, workforce participation among older workers, and evolving age equality standards under the Employment Equality Acts 1998–2021.
What is changing?
Until now, employers could rely on contractual retirement ages, provided they were objectively justified under age discrimination law. The 2025 Act introduces a specific statutory notification and justification framework where the contractual retirement age is below 66.
In summary:
- An employee may formally notify their employer that they wish to work until 66.
- The employer cannot enforce the contractual retirement age without issuing a reasoned written response within one month.
- Any refusal must be objectively and reasonably justified by a legitimate aim, and the means of achieving that aim must be appropriate and necessary.
- The assessment must relate to the individual employee, not just a general class of workers.
The threshold is deliberately high and goes beyond the general justification test under the Employment Equality Acts.
Who is in scope?
The Act applies where:
- There is a contractual retirement age below 66.
Employees who are:
- Still within probation, or
- Subject to statutory maximum retirement ages (e.g. certain public service roles)
may fall outside the scope.
1. Notification requirements – strict timeframes
An employee who does not consent to retire must notify the employer in writing:
- Not less than three months and not more than one year before reaching the contractual retirement age; or
- Where the contractual notice period exceeds three months, not less than that notice period or six months (whichever is shorter).
An employee may not notify more than twice in any six-month period.
This creates a clear procedural gateway for employers to manage.
2. The justification Test
Once notified, the employer must provide a reasoned written reply within one month.
The reply must demonstrate:
- A legitimate aim (for example, workforce planning, health and safety considerations, intergenerational fairness, succession planning); and
- That enforcing the retirement age is appropriate and necessary to achieve that aim.
Importantly, the Minister confirmed during legislative debates that this is not a generalised test. Employers must justify the retirement age in relation to the individual employee and role, including consideration of the employee’s continued ability to perform their duties.
The WRC will assess:
- The nature of the work
- Health and safety implications
- Business impact
- Whether the justification meets the statutory standard
A blanket reliance on “company policy” will not suffice.
If the employer fails to issue a compliant written reply, the employee may remain employed until 66 unless an alternative date is agreed.
3. Penalties and Enforcement
An employee may bring a complaint to the Workplace Relations Commission (WRC).
The WRC may:
- Declare the complaint well-founded
- Order reinstatement or re-engagement
- Award compensation up to 104 weeks’ remuneration or €40,000 (whichever is greater)
Criminal liability also arises where:
- An employer fails to provide a reasoned written reply
- A company officer consents to or is complicit in the breach
Sanctions may include fines of up to €5,000 and/or up to 12 months’ imprisonment.
This is a notable escalation in risk exposure for non-compliance.
4. Protection against penalisation
The Act prohibits penalisation (or threats of penalisation) where an employee exercises their right to notify.
Penalisation includes:
- Dismissal
- Demotion
- Suspension
- Harassment
- Transfer of duties
- Any detrimental treatment
This aligns with Ireland’s broader protective legislative trend, including strengthened whistleblowing protections under the Protected Disclosures (Amendment) Act 2022.
Wider context: Age discrimination and retirement in Ireland
Even before commencement, retirement practices remain subject to the Employment Equality Acts. Employers must already justify mandatory retirement ages.
Recent case law demonstrates that:
- Objective justification must be evidence-based.
- Legitimate aims such as succession planning, safety, and dignity in retirement may be accepted — but only where proportionate.
- Inconsistent application across comparable roles creates significant discrimination risk.
The 2025 Act narrows employer discretion further and formalises the process.
Practical checklist for employers
1. Conduct a retirement audit
Identify employees:
- With contractual retirement ages below 66
- Reaching retirement age within the next 18–24 months
This allows for forward planning.
2. Review contractual retirement clauses
Consider:
- Whether retirement ages below 66 remain defensible
- Whether justification can be evidence-based and role-specific
- Whether retirement provisions require amendment
3. Develop a formal notification handling process
Create:
- A template acknowledgement
- A structured individual assessment framework
- A template reasoned written response
- A governance review step for high-risk decisions
4. Assess objective justification role-by-role
Prepare documentation addressing:
- Health and safety considerations
- Operational necessity
- Succession and workforce planning
- Business continuity
- Proportionality of enforcement
Avoid generic rationales.
5. Align pensions, benefits and insurance
Extended employment may affect:
- Occupational pension scheme rules
- Income protection
- Death-in-service cover
- Employer liability insurance
Professional advice in these areas may be required.
6. Train HR and managers
Managers must understand:
- Notification timelines
- The one-month response requirement
- The individualised assessment standard
- Risks of informal comments or pressure
7. Plan for cultural change
Ireland’s workforce is ageing. Employers should consider:
- Knowledge retention strategies
- Flexible phased retirement models
- Intergenerational workforce planning
Forward-thinking employers may see this as an opportunity rather than risk.
Conclusions
Although the Act has not yet commenced, employers should prepare now. The 2025 Act signals a clear policy direction, retirement is no longer a purely contractual event, it is a regulated decision requiring individual assessment, procedural compliance and documented justification.
If you require more information on this key change to retirement in Ireland, please contact HRP Group on 01 676 0006 or email info@hrpgroup.ie
This article is provided for information purposes only and does not constitute legal advice. Specific advice should be obtained in relation to individual circumstances.
