Workers should be encouraged to work longer and mandatory retirement ages should be abolished, a report by the Organisation for Economic Co-operation and Development (OECD) report on the Irish pensions system will recommend today, writes Emmet Oliver.
The report, to be released at the Fás annual labour market conference in Dublin, will also suggest unemployed workers over the age of 55 should still be required to seek work. They should no longer be allowed leave the live register and claim the pre-retirement allowance, the report suggests - the OECD, a Paris-based think-tank, represents 24 of the world's leading economies, including Ireland.
At present, those unemployed between 55 and 65 can effectively enter retirement early and are no longer required to seek work. If they have been claiming unemployment assistance for 390 days or unemployment benefit for 390 days, they are entitled to pre-retirement allowance and no longer need to seek work. The report suggests this allowance be abolished.
The report predicts that Ireland's relatively low old-age dependency ratio will more than double by 2050. Consequently more older workers will have to remain in employment in order to ease the upward pressures on pension and healthcare costs, says the report. It says productivity levels generally will have to rise and that means retaining more people in the workforce even when they get older. The report strongly supports the idea of scrapping mandatory retirement ages so that people can work "as long as they want".
The report, written by a team of OECD experts, contains suggestions which are likely to prove controversial on social grounds. For example, it recommends a shift in the focus on disability benefits, saying there should be more emphasis on determining somebody's remaining work capacity and less on their degree of incapacity.
While some suggestions are likely to face opposition from the social partners, the report acknowledges older people will need training to help them to remain in the workforce. The report says the national training fund play a greater role in boosting the skills of the workforce. The report will be launched today by Minister of State Tom Kitt.
Mr Kitt is expected to tell the Fás conference that the Government is already setting aside a considerable sum, with the pension reserve fund to meet long-term needs.
The sometimes controversial suggestion that people should work beyond 65 was recently broached in the National Pensions Review. It suggested people should be able to postpone claiming the State pension at 65 in return for receiving larger payments later.
Their estate would be compensated, however, for the pension forgone if they should die during that time.
People would not be forced to stay on at work if they did not want to, but equally they could not be forced to leave by companies either, the pensions review said.