The damage done by the international financial crisis is so acute that an expert says it may be necessary to delay the retirement age from 65 closer to 70 years.

Ray Kinsella, professor of banking and financial services at UCD, says the damage done to company values will have negative ramifications for pension funds for decades to come.

He says that the burden of risk associated with pension funds has shifted increasingly towards employees as defined benefit schemes are closed off to new employees or discontinued.

Speaking on RTÉ Radio's Morning Ireland, the professor said that the extent of the international credit crisis is only now becoming apparent.

He says that will translate directly into a fall in the assets of pension funds.

He says this is the most severe and protracted recession in living memory and the ramifications for the valuation of companies will go on for decades.

Prof Kinsella explained that the problem is compounded by the move by 'stealth' from a defined benefit to a defined contribution pension system.

This pushes the risk of an adequate pension provision onto individuals.

When this is combined with the severe hits financial institutions have taken in recent months the outlook is pretty gloomy, Dr Kinsella said.

He says the fall in the assets of pension funds, combined with the fact that the risk is being transferred to individuals, means that people either have to save much more to guarantee an adequate income, or accept a lower standard of living or be forced to work longer.