The association representing small and medium sized businesses here has said its considering taking a test case to the High Court over what it describes as tax discrimination against private sector workers in relation to pension contributions.

ISME says legal action may be required to "stop tax discrimination against private sector workers in the treatment of their pensions" when compared to public sector workers.

"There is currently a twin-track approach to pensions in Ireland where those who work in the private sector cannot avail of supports from the State, while those working in the public sector do," said ISME's CEO Neil McDonnell in a statement.

"Tax relief on private sector pension savings is tax deferred. It is not tax avoided."

"We now have a great opportunity to fix this anomaly and to ensure that all workers are entitled to the same rights when it comes to pensions."

"Simply put, we are looking for a fair pension system on behalf of the private sector worker."

ISME says workers in the private sector who are saving for pensions need to be incentivised to have a legitimate reason to have a pension and to plan properly for retirement. 

The association says a number of factors stand in the way of a fair and balanced pension system for private sector workers. 

These include the Standard Fund Threshold which imposes a €2m lifetime limit above which private pensions do not receive tax relief.

The organisation also has issues with the income limit for PAYE workers which stands a €115,000.

ISME is also concerned about the potential for a reduction in the tax relief on pensions from the marginal rate down to 20%.

The association says it has been contacted by a range of private sector workers, pension trustees, pension brokers and other interested parties who have raised the issue of "real unfairness for private sector workers".

It says it is in discussion with interested parties to bring a test case to the High Court and has invited anyone with an interest in the area to contact it.