Ireland has announced that the Employment (Contractual Retirement Ages) Act 2025, effective 29 June 2026, introduces a new employment right for eligible employees. Under the legislation, employees whose contractual retirement age is below the State Pension age of 66 may request to remain in employment until they reach State Pension age.
The legislation aims to address the income gap faced by employees who are required to retire before they become eligible for the State Pension. It forms part of a broader package of pension and employment reforms designed to support longer working lives and provide greater flexibility for older workers.
What Is Changing?
The new right applies to employees whose employment contracts specify a retirement age below 66. Eligible employees may formally notify their employer that they do not consent to retire at their contractual retirement age and wish to continue working until they become eligible for the State Pension. To benefit from this new right, employees must provide:
- at least three months’ notice, and
- no more than 12 months’ notice before the intended retirement date.
If a contract requires a longer notice period, employees must provide that notice or six months, whichever is shorter.
Employees must give notice between three and 12 months before their intended retirement date. Employers must consider the request and, if they intend to enforce the contractual retirement age, provide a written response. Any refusal must be objectively justified, supported by a legitimate business aim, and proportionate to that aim.
The legislation does not apply where retirement ages are set by law or where contractual retirement ages already meet or exceed the State Pension age.
Practical Implications for Payroll and HR
While the legislation is primarily an employment law development, it also has implications for payroll, benefits, and workforce planning. Organisations may need to review employment contracts, retirement policies, pension administration processes, and payroll-related workflows for offboarding employees close to retirement age.
More broadly, the change reflects a trend across many countries, as governments encourage longer working lives in response to demographic shifts and pension sustainability concerns. For payroll leaders, it highlights the importance of understanding how employment law, pension policy, and payroll processes interact throughout the employee lifecycle, and of ensuring that retirement-related processes remain compliant and fit for purpose.
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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll.
