ReactionThe Irish Association of Pension Funds (IAPF) has welcomed the proposed introduction of special saving incentive account-style pensions.

It described it as "a very positive change to the tax regime and should encourage greater levels of retirement savings, particularly from those on the standard rate band and those outside the tax net, areas where pension coverage is lowest".

But the organisation, which represents pension funds and institutions, has called for the same incentives to be extended to traditional occupational schemes.

A simple tax credit mechanism equivalent to the euro-for-euro contribution proposed by the National Pensions Review should be introduced said Joe Byrne, chairman of the IAPF.

The organisation is concerned that existing occupational schemes may unravel if members move to the new schemes to avail of more attractive incentives.

Actuaries and consultants Watson Wyatt also pointed out the need for the proposed euro-for-euro top-up system to be extended to occupational schemes. Raymond McKenna, the managing consultant of the firm said: "While there are costs associated with extending the tax incentives as they currently exist, we believe that they will be more than offset in the longer term by reduced reliance on the State and the additional tax revenue generated from pensions when they come into payment."

The Society of Actuaries highlighted the proposal to enhance the State pensions of people who elect to work longer or delay drawing down the pension. The society had previously recommended this as a step towards recognising the impact of increased life expectancy.

It also supported the cautious approach adopted by the review to the issue of mandatory pensions. There was scope to improve the current voluntary regime and it was too early to consider further increases in the level of mandatory contributions, the society said.

Pension consultants Mercer commended the Minister for Social and Family Affairs, Séamus Brennan, for not rushing to adopt any of the measures proposed. "We are pleased that the Minister seems determined to get it right rather than rush into action. However, we hope the Minister will make real progress this year," said Joyce Brennan, a senior consultant with Mercer.