Conference on Active Ageing told more flexibility needed for people to work beyond retirement age

Posted on: 25 June 2007

• Ireland’s ageing population poses serious long-term dangers for the economy
• Too many obstacles in the way of people wishing to work after retirement
• Society needs to end its prejudice against older people in the workforce

Ireland needs to introduce flexible arrangements that will encourage older people to continue working up to and beyond retirement age, a major international conference on ageing was told in Trinity College Dublin.

Professor Brendan Whelan, Research Director of TILDA (The Irish Longitudinal Study on Ageing) told some 100 delegates: “Failure to retain fit and healthy older workers in the labour force means that, on an individual level, people can fail to realise their full potential and may suffer financial hardship. On a national level, it also poses serious dangers for the Irish economy as our population continues to age over the coming decades”. The conference was organised jointly by TILDA and ASPEN, the Active Social Policies European Network.

“Too many obstacles are put in the way of people remaining in the workforce at older ages. Policymakers in Ireland need to understand that an enormous pool of talent and experience that can benefit Ireland’s economy and society may be lost by the failure to introduce appropriate policies with regard to pensions, healthcare and social welfare specifically geared to the needs of older workers. We can learn a lot about how to design such policies from other countries and our conference brings together leading international experts for this purpose.” Professor Whelan stated.

He cited forecasts from the ESRI that the current ratio of about 4 working people for every one person over 65 years will fall to 2.5 within 20 years and to 1.5 by mid-century. “That represents a two-pronged threat in the form of the cost of meeting increased social welfare costs from a smaller working population and also the shortage of labour that will result. We cannot assume that immigrant workers will automatically make up the labour shortfall”, Professor Whelan said.

“Society has to end its prejudice against older people continuing to work beyond retirement age – if they wish to do so.”, he concluded.

Addressing the conference on the implications of ageing for the pensions industry, Donal Casey, Chief Executive of Irish Life Corporate Business – which has donated €4 million to the TILDA research – said that Ireland is in a better position than most other countries to cope with the problem.

“Ireland has a comparatively young population and we are in an immeasurably better position than countries such as Germany and Japan which are already suffering the consequences of an ageing population. We have time to prepare for the pension funding challenge, initiatives such as the National Pensions Reserve Fund have been taken by the Irish government while the pensions industry itself is also taking initiatives that should ensure this country does not suffer from any ‘pensions time bomb’ down the line”.

Mr Casey added, however, that Ireland cannot be complacent about the future and agreed that policymakers should enact policies that will make it easier and more attractive for older people to continue to make a contribution by working beyond retirement age if they wished to do so.

Professor Michael Hurd from the Rand Corporation in the USA warned, however, that once workers become eligible for pensions, this tends to accelerate the move towards retirement. “The implication is that any public policy which encourages firms to provide pensions should be carefully framed lest retirements lead to an excessively reduced workforce”, Professor Hurd stated.

Professor James Banks of University College London told the conference that the fact that many future retirees are less likely to have defined benefit pensions may lead to an increase in labour market participation by older people. He added: “Policies to raise labour market participation need to be much broader than just changing the state pension age. Much more work needs to be done on how health, disability and labour market participation interact as households move through their 50s and 60s”.

Ashgar Zaidi of the European Centre for Social Welfare Policy Research told delegates that there is already some international evidence that the effective retirement age is on the increase. “Results suggest that the increase in the employment rate of older workers is stronger for women than for men, and also there is a bigger rise for the more highly educated”, Mr Zaidi said.

Other speakers at the conference emphasised the value of phased or gradual retirement to both the individual and society. The particular importance of attracting and retaining women in the workforce was also stressed.

Prof RoseAnne Kenny, Chief Research Director TILDA, Donal Casey, Chief Executive of Irish Life Corporate Business and Prof Brendan Whelan, Research Director of TILDA