Age discrimination!

A friend of mine will be 65 this month. For this reason he has been told he is being terminated - his employment contract makes no reference to having to retire at 65.

He has contributed to a DB pension scheme which is independent of his employer. In this scheme the age of 65 is used to allow him to take his pension if he leaves his work but also allows him to continue to accrue pension entitlement past this age till he has full entitlement - he has 25 years pensionable service in this scheme.

He also has avc's in a DC scheme that he has pays into to when he could. When he went to find out the value of his avc's he found that the value of this fund is only 75% of the original money he invested.

Q. Does his employer have to justify ending his employment on grounds other than age? He does not want to give up his job and is very good at it (professional person ) so what can he do.

Q Can he defer taking his avc's until the market comes back hopefully to at least equal to the original sum he invested. or

could be get an ARF to the value of the original investment from the same financial institution (Irish Life)

You'll have to get your friend to look at his contract - some places will hire people after 65 but will only give them yearly contracts.

pinkyBear said:

You'll have to get your friend to look at his contract - some places will hire people after 65 but will only give them yearly contracts.

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He did...

when I'm 64 said:

- his employment contract makes no reference to having to retire at 65.

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If his current contract is terminated with his employer and a new one started the terms does not allow him to continue contributing to the DB scheme.

He is of the opinion that his employer has to objectively justify his termination on grounds other than age and his employer is saying it is only based on age.

Employers can set retirement ages and it is not discrimination to retire someone at that age. If there is nothing in his contract, what is the custom and practice for his grade?

You can always check with the Equality Authority if the employer can discriminate on this ground alone particularly as it is not in the contract.

He has contributed to a DB pension scheme which is independent of his employer.

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How do you get a defined benefit scheme independent of your employer?

Is it from a previous employer? If so, what happens with the current employer should not matter.

brendan

Thank you for all comments.

Regarding DB - the pension trust has multi employers. It is not a balance of cost and if there is a shortfall the employers do not have to shore it up. It is not on the balance sheet of the employer. it is considered that the trust cannot affect an employees terms and conditions of employment.

Regarding EA - my friend has got general advice and it looks like he has a good case . However he wonders why he has to prove why he should stay in his job. His view is that the employer must justify why he has to leave his job once he reaches 65.

He also came across legal websites that indicate that employers have to justify terminating staff at age 65 .
In the past when his colleagues left at the same age most were forced out because they were told you won't have a place to work if you turn up - i.e. lock out!!!

Regarding his avc's - anyone any thoughts as to what he can do?

When I,m 64,


Good mail, interesting subject ....


On AVC issue, your pal has to either take it all now, or leave it all in scheme until the market recovers ......

Is he paying commission to a broker for ongoing advice on the AVC? If so, the broker should really have been advising him to switch to less-volatile funds as he approached retirement age.

On AVC issue, your pal has to either take it all now, or leave it all in scheme until the market recovers ......[/quote]

Thanks - He is surprised that if he is forced out of his job because of his age that he cannot separate his DC avcs from his main DB pension and hold on to it for a few more years.

My friend said he intended moving to a cash fund in a few years. This was because he expected to be still working but he is being forced out of his job at age 65 - which is extraordinary in the 21st century that this ageist attitude is around. He is also trying to persuade his children and their friends (who are in their 30's) to start a pension and because of what is happening to him they are saying no way.

Final Q - if as indicated above he is also forced to take the DC fund - is there any tax relief on the 20% capital loss? Forgive me if this belongs to another forum.

Update - my friend is no longer being forced to retire because of his age (65).

By chance one of his employers company directors heard that the Personnel and Legal departments were doing this and was amazed. When he told the other board members the same reaction . The company is a publicly quoted company with international directors with considerable number of pension funds as investors and these directors come from countries where age is not used as an expiry date. They obviously also did not want the negative publicity that would result from an age discrimination case.

So my friend is delighted and can come in to work next week. Great that international/European thinking has overruled the negative Irish attitudes to age.

However he still has a problem with the losses in his DC scheme - running around 20/25% depending on the day he gets a value. He has been told he has to take the losses on his capital invested and there is no tax allowance/offset for this.

Is this true?

Thats good news, hope all goes well for him.


On the tax rebate issue, my belief is he is entitled to nothing on either the AVC or pension, as generally on investments you get tax credits for losses that apply to your other investments, he is 65 , so pays no CGT anyway.

Will confirm that for you.

Thanks hope there is something .

Regarding compulsory retirement at age 65 or younger- looks like things are changing for everyone - heard on the radio today case being taken to EA and general view is that this is pushing an open door.

A pity that employers or the state don't just bring themselves up to date. It is acceptable that there are some occupations that may require restrictions but not due to age and these occupations/situtions just have to be objectively justified. One has just to search the internet and all the guidelines for objectively justified occupations are there .

As said on the radio today the situation is very similar to the marriage bar up to the 1970's and in a number of years time people will wonder what was going on.

Any update on the tax relief. Based on his current losses it will take years for him to make up the losses on his original pension capital invested.
Also he hears that from this year when he does take his pension and moves what is left of his capital to an ARF then there is now up to 3% tax to be paid on the capital. Is this also correct.