New rules on retirement ages: the Employment (Contractual Retirement Ages) Act 2025

Editor’s note (do not publish until confirmed): As written this reflects the Act’s signed-but-not-yet-commenced status. Do not state the Act is “in effect” until a ministerial commencement order is actually made. Verify the current position before publishing.

A significant change to how Irish employers manage mandatory retirement is on the way. The Employment (Contractual Retirement Ages) Act 2025 was signed into law on 16 December 2025. It introduces a new statutory right designed to bridge the gap between a contractual retirement age and the State pension age of 66.

The Act is signed but not yet in force. It requires a ministerial commencement order, and a Code of Practice on objective justification is expected during 2026. Employers should prepare now, but the new process does not apply until commencement.

What the Act does

Where a contract sets a retirement age below 66, an employee who does not wish to retire at that age can notify their employer in writing, at least three months and not more than twelve months before reaching it, that they wish to keep working towards the State pension age.

The employer must then provide a reasoned written reply within one month. The earlier retirement age can only be enforced where it is objectively and reasonably justified by a legitimate aim. Failure to give a reasoned reply without reasonable cause becomes a new offence, carrying a class A fine of up to €5,000 and/or up to twelve months’ imprisonment. Employees are also protected from penalisation for exercising the right, and can bring a complaint to the Workplace Relations Commission.

The benefits angle employers miss

This is not only an HR issue — it has direct group-risk consequences. Many occupational pension schemes have a normal retirement age of 65, and insured benefits such as death-in-service and income protection often cease at 65. If employees can now work towards 66, those policy ages need to be checked with your insurer so cover doesn’t quietly fall away while someone is still employed.

What to do now

Review retirement clauses across your contracts, consider whether a sub-66 retirement age is still justified, design a clean process for handling notifications and the one-month reply, and review your group life and income protection policy ages alongside it. We can run that group-risk review with you.