Legislation that will allow public servants to stay at work up to the age of 70 if they so choose has been signed into law by President Michael D Higgins.

Previously, public servants had to retire by 65 at the latest, despite the fact that the age for qualifying for the State pension is 66.

This left some workers with a gap in retirement income. In addition, some employees wanted to continue in their posts beyond 65.

While there were some interim measures allowing staff to be re-hired until the age of 66 when the State pension kicked in, they treated staff as newly employed, resulting in a drop in income despite doing the same work.

Unions had lobbied for workers to be allowed to stay on until 70, which they will now be able to do on their existing pay and conditions under the Public Service Superannuation (Age of Retirement) Bill.

There had been fears that implementation of the legislation would be delayed until next year, which would have meant that State employees hitting the age of 65 over the Christmas break would have to retire.

However, the bill completed its passage through the Seanad last week and becomes effective today, having been signed by President Higgins.

The legislation will apply to most public servants recruited before 1 April 2004, other than the designated uniform grades such as gardaí, prison officers, fire fighters and members of the Permanent Defence Force.

Minister for Finance and Public Expenditure and Reform Paschal Donohoe has welcomed the change.

"The new compulsory retirement age of 70 reflects the fact that people are living longer, healthier lives and that many wish to remain at work for longer because they feel they have more to contribute to work and to society," he said.