The Minister for Social and Family Affairs Seamus Brennan has given a strong indication that he is considering making it mandatory for people to contribute to personal pension plans.
Speaking at the annual conference of the Irish Association of Pension funds, he said the Government might have to 'think the unthinkable' in its efforts to boost pension coverage.
Currently 900,000 out of the two million people in the workforce have no pension provision apart from an entitlement to the state social welfare pension.
Minister Brennan said the Government could not just do nothing about this situation.
The Pensions Board is currently carrying out a review of the pensions system, which is due to be presented to the Minister next month. Earlier this year the board selected five systems for assessment in the review, two of which involved mandatory contributions.
The Irish Congress of Trade Unions said it was open-minded and positive about the concept of compulsory pension plans. ICTU general secretary David Begg said Congress was determined that pensions would be a very big issue in the forthcoming social partnership talks due to start next month.
But the employers' body IBEC said it was totally opposed to the introduction of compulsory pensions, saying the timing of any such initiative was wrong.
The Minister also told today's conference he had signed into law an EU Directive providing for the administration of cross-border pension schemes. He sid this provided 'tremendous opportunities' for Ireland and a task force was looking at how the country could take advantage of these. Also at the conference, Brian Buggy of Matheson Ormsby Prentice said the move could make Ireland the pensions administration capital of Europe.
Minister Brennan also said that although he had decided to allow single member pension schemes to continue to borrow, the current system was under review, and his decision did not prejudice the outcome of this review.
Meanwhile EU Internal Market Commissioner Charlie McCreevy told the conference a pensions time bomb was ready to explode sometime after 2010. He said the main responsibility lay with citizens, but governments had a role to play by providing the necessary incentives.
