The Employment (Contractual Retirement Ages) Act 2025 (Act) came into effect on 29 June 2026.

Under this Act, if an employee has an employment contract with a mandatory retirement age that is lower than the State pension age (currently 66) (State Pension Age), the employee has the right to notify their employer that they do not consent to retire at that earlier age. The Workplace Relations Commission (WRC) has also updated its Code of Practice on Longer Working (Code) to reflect what employers and employees need to do under the Act.

To avail of the new entitlement, an employee must notify their employer (at least three months before their contractual retirement date) that they do not consent to the retirement date set out in their contract. Where, following receipt of that notification, an employer proposes to enforce the employee’s existing contractual retirement age, the employer must:

• reply within one month of receiving the notification;
• provide a written, reasoned reply to the employee; and
• outline how a legitimate aim objectively and reasonably justifies the contractual retirement age.

Failure to provide a reasoned written reply in the manner prescribed by the Act is a criminal offence. In addition, a breach of the Act can be referred to the WRC within six months of the date of the breach (extended to 12 months in certain circumstances), with the maximum compensation payable to an employee being two years’ salary or €40,000, whichever is the greater.

Pensions implications

On the employment law side, the Act creates an additional avenue of challenge in an area that is already the subject of frequent disputes and litigation.

From a pensions perspective, the exercise of entitlements under the Act may give rise to a number of practical and legal issues for employers.

The trust documentation governing many occupational pension schemes in Ireland currently sets a “normal retirement date” for scheme purposes of 65. While many schemes already provide for situations where an employee remains in service beyond normal retirement date, late retirement rules in defined contributions schemes often provide that employer and employee contributions beyond normal retirement date are subject to employer discretion. For defined benefit schemes, similarly, the accrual of benefits beyond normal retirement date is often subject to employer discretion. Employers should, therefore, investigate any potential differences in treatment pre and post normal retirement date under scheme rules and consider how their proposed approach to compliance with the Act interacts with their scheme provisions.

Some additional issues may also arise because the Act appears to contemplate a continuation of the employee’s existing contract of employment rather than the employee entering into a new contract for the period between their contractual retirement age and the State Pension Age. The continuation of the existing contract would result in the continuation of any existing terms and conditions relating to pensions and insured benefits.

Where employees’ existing terms and conditions are maintained to State Pension Age, the Act may, in some cases, lead to misalignment between the terms of employment contracts and pension scheme rules. This risk is particularly acute where an employee’s contract expressly provides for pension benefits during employment, such as an employer contribution of 5% of salary. While a well-drafted contract will contain appropriate caveats highlighting that membership of a pension arrangement is subject to the terms of that arrangement, some contracts are likely to be deficient in this regard. Where appropriate caveats have not been included, employees may argue that their contractual entitlement to such benefits continues to State Pension Age, irrespective of the arrangement’s rules.

Similar issues may arise in relation to insured benefits. For example, an employment contract may provide for death-in-service cover of four times salary, while the underlying insurance policy will often provide that cover ceases at age 65. Insurers may be unwilling to extend cover beyond that age, or may only agree to do so at a significantly increased cost. However, an employer’s inability to secure continued insurance cover would not necessarily remove any contractual entitlement an employee enjoys.

As the Act may result in higher numbers of employees remaining in employment to State Pension Age, employers should also remain mindful of the ongoing risk of age discrimination claims under employment and pensions legislation where pension and/or insured benefits cease at age 65, regardless of whether those benefits are expressly referenced in the employee’s contract of employment.

Next steps

Employers who are likely to receive requests under the Act and who provide pension and/or insured benefits should prioritise reviewing the terms of their pension schemes and insured benefits arrangements. In particular, employers should identify whether there is any mismatch between:

• the terms of employment contracts;
• pension scheme rules;
• insured benefits arrangements; and
• the benefits that the employer intends employees to receive in the period between their contractual retirement age and State Pension Age.

Where inconsistencies are identified, employers should consider how best to address these. This may become particularly important if facilitating employment up to State Pension Age becomes common practice within the organisation. Any proposed pension scheme amendments will need to be considered in conjunction with the scheme trustees. In the case of defined benefit schemes, employers and trustees may also need to assess the funding implications of any proposed changes.

Employers should also engage with their insurance brokers at an early stage. Cover under many insured arrangements ceases at contractual retirement age, and insurers may impose restrictions or additional costs where employers wish to extend cover to employees who remain in service until State Pension Age.

We recommend that employers assess the impact of the Act and the Code now, rather than addressing issues on an individual basis as requests arise. Given the requirement for employees to provide at least three months’ notice, the earliest retirement dates likely to be affected by the Act will fall in September 2026. This provides employers and trustees with a limited but valuable opportunity to review existing arrangements and implement any necessary changes.

Please contact your usual William Fry contact if you have any questions regarding how the Act may impact your organisation or require guidance in reviewing and updating your retirement policies and practices.