Thousands of public service staff will in future be permitted to work until the age of 70 under new Government returns.

The Minister for Public Expenditure Paschal Donohoe said the decision of State employees to remain on after the traditional retirement age of 65 would be optional. He said there would be no changes to minimum retirement ages.

The new reforms, which were agreed by the Cabinet on Tuesday, affect public service staff recruited prior to April 2004.

The Department of Public Expenditure said public servants taken on after April 2004 either already have a retirement age of 70 or have no compulsory retirement age.

The new changes would also not apply to frontline groups such as gardaí, firefighters, defence force personnel and prison officers who are required to retire earlier than other public service staff due to the nature of their work and who have accelerated pension schemes.

Mr Donohoe said under the changes staff who opted to stay on beyond age 65 would have to continue to make pension contributions even if they had paid for 40 years to qualify for a full pension. He said they would not receive further pension entitlements.

He forecast the planned reforms would have a minimal impact on staff promotional prospects as the State was now recruiting more workers.

The Minister said legislation would be needed to implement the changes and he hoped to introduce this early next year.

However he said interim measures would be put in place for staff who reached the age of 65 and who wished to remain on.

He said these personnel would retire and then be rehired so they remained in employment until they reached age of qualification for the State pension, currently 66.

Mr Donohoe maintained any increased costs involved for the State in permitting public service staff to work for longer would be offset by delays in not having to pay retirement lump sums for the personnel concerned.