New Retirement Age Legislation Takes Effect on 29 June 2026

July 1, 2026

The Employment (Contractual Retirement Ages) Act 2025 came into effect on 29th June 2026 and introduces significant new obligations for employers who operate a contractual retirement age below the State Pension Age of 66.


While the legislation does not abolish mandatory retirement ages, it changes how employers must manage retirement where an employee wishes to continue working beyond their contractual retirement age.


What is changing?


Under the new legislation, an employee whose contract contains a retirement age below 66 may notify their employer that they do not consent to retiring at that age and wish to continue working until they reach the State Pension Age.


Once such a notification is received, an employer can no longer simply rely on the contractual retirement age and proceed with retirement. Instead, the employer must consider the request and provide a reasoned written response.


This represents a significant shift in how retirement requests should be managed. Retirement should no longer be viewed as an automatic administrative process, but rather as an employment decision requiring careful consideration, consultation and documentation.


Can an employer still enforce a retirement age?


Yes, the legislation does not prohibit contractual retirement ages. However, where an employee wishes to continue working, the employer must be able to demonstrate that requiring retirement is objectively and reasonably justified by a legitimate aim and that the means of achieving that aim are appropriate and necessary.


This means employers should be prepared to clearly explain why a retirement age remains necessary in the particular circumstances and be able to support that decision with evidence if challenged.


What are objective grounds?


One of the key concepts within the new legislation is objective justification.


Objective grounds are genuine business reasons which justify requiring an employee to retire at a particular age. The reason must pursue a legitimate business aim and the employer must be able to demonstrate that compulsory retirement is an appropriate and necessary way of achieving that aim.


Examples of legitimate objective grounds may include:


  • Protecting the health and safety of employees, service users or members of the public where the role is safety critical.
  • Workforce and succession planning where retirement forms part of a structured approach to career progression.
  • Maintaining operational effectiveness where particular roles require specific physical or cognitive capabilities.
  • Preserving employee dignity by avoiding capability or performance management issues later in an employee's career.
  • Ensuring continuity of service where there is a genuine operational requirement supported by evidence.


Employers should remember that simply identifying one of these reasons is not enough. They must also be able to demonstrate why compulsory retirement is proportionate in the circumstances and why there is no less restrictive way of achieving the same objective.


Likewise, simply stating that "it's company policy", "everyone retires at 65" or "it's in the contract" is unlikely, on its own, to satisfy the legal test.


When must an employee notify the employer that they do not consent?


Generally, an employee must notify the employer in writing:


  • Not less than 3 months before reaching the contractual retirement age; and
  • Not more than 12 months before reaching the contractual retirement age.


Different notification periods may apply where longer contractual notice provisions exist.


What happens if an employer receives notice of objection?


Employers will need to:


  • Review the objection carefully.
  • Consider whether there are objectively justifiable grounds for requiring retirement and ensure those grounds are supported by evidence.
  • Consult with the employee where appropriate.
  • Provide a reasoned written response within the required timeframe.
  • Ensure decisions are evidence-based, consistent and appropriately documented.


Failure to comply with the legislation may expose employers to WRC claims and other legal risks. The Act also introduces offences where an employer fails, without reasonable cause, to provide the required reasoned written response.


Important: A retirement age of 66 does not remove all risk


It is important to note that the new legislation primarily addresses contractual retirement ages below the State Pension Age of 66. However, employers should not assume that increasing their retirement age to 66 removes the possibility of challenge.


Employees may still request to remain in employment beyond the State Pension Age and employers will continue to be required to consider such requests carefully.


Refusing a request to work beyond retirement age may still give rise to claims under the Employment Equality Acts on the grounds of age discrimination.


For example, an employee with a contractual retirement age of 66 may still request to remain working beyond that age. While the Employment (Contractual Retirement Ages) Act 2025 may not apply in those circumstances, employers must still carefully consider the request and ensure that any decision to refuse it can be objectively justified and supported by legitimate business reasons.


Failure to comply with the legislation may expose employers to claims under the Employment Equality Acts, where compensation for age discrimination can be up to 104 weeks' remuneration. Recent WRC decisions also demonstrate an increasing willingness to award significant compensation and, in certain circumstances, to disapply statutory compensation limits where they are found to be incompatible with EU law. Employers should therefore focus not only on the potential financial exposure, but on ensuring that retirement decisions are evidence based, objectively justified and procedurally fair.


The introduction of this new legislation should therefore be viewed as part of a broader trend towards longer working lives and increased scrutiny of compulsory retirement practices.


What are employers doing in practice?


In response to increasing employee requests to remain working later in life and the evolving legal landscape, many employers are retaining a contractual retirement age while introducing greater flexibility around retirement planning.


This often includes:


  • Structured pre-retirement discussions.
  • Flexible working arrangements leading up to retirement.
  • Phased retirement options.
  • Temporary extensions to Retirement age where appropriate.
  • A formal process for employees wishing to request an extension beyond retirement age.


Having a defined process allows employers to plan workforce requirements while ensuring requests to work beyond retirement age are considered fairly, consistently and in line with both the new legislation and the Employment Equality Acts.


For many employers, the focus is no longer simply on setting a retirement age, but on having a transparent and well-documented process for managing retirement and longer-working requests.


What should employers do now?


With the legislation now in force, employers should take the opportunity to review:


  • Contracts of employment containing retirement ages of 65 or below.
  • Retirement policies and procedures.
  • Existing retirement planning processes.
  • The rationale for any contractual retirement age currently in place.
  • How notice of refusal and requests to work beyond retirement age will be managed and documented.
  • Whether managers understand the new legal requirements and are equipped to deal with requests appropriately.


Employers should also ensure that retirement is no longer treated as an automatic administrative process. Early retirement planning, meaningful consultation and careful consideration of requests to remain in employment will be increasingly important in reducing legal risk and ensuring compliance with both the new legislation and the Employment Equality Acts.


How MSS The HR People can help


With the legislation now in force, now is an ideal opportunity to review your contracts of employment, retirement policies and longer-working procedures to ensure they remain fit for purpose and compliant with the new legal requirements.


Waiting until an employee submits a request to remain working beyond retirement age may leave your company on the back foot. A proactive review now can help ensure that managers understand their obligations and that appropriate procedures are in place before a request arises.


MSS The HR People can assist with:


  • Reviewing contracts of employment and retirement clauses.
  • Updating retirement policies and procedures.
  • Developing longer-working request processes.
  • Advising on individual retirement requests.
  • Training managers on the new legislation.
  • Ensuring your company is prepared for the changes now in effect.


For support on any of the above, don’t hesitate to contact MSS The HR People at info@mssthehrpeople.ie or call +353 (0)1 887 0690.



Amy Vickers

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