Speaking in a personal capacity, Tiarnan O'Mahoney said that forcing employers to pay into pensions would drive up labour costs and damage Ireland's competitiveness . . . and could lead to workers losing their jobs.

"It doesn't make sense to cause job losses to pay for pensions, " he said. "Once you have a job, you have the wherewithal to pay for your own pension. The bottom line is that it's better to have a job with no pension than no job and no pension."

O'Mahoney said he fully supports compulsory pensions, so long as employers do not have to pay up. "I'm happy to have mandatory pensions, but I don't think employers should have to pay over and above what they're already paying in PRSI, " he said.

"We need to keep Ireland competitive, especially at a time when a lot of small indigenous manufacturing companies are hanging on by their fingertips. Adding another 6% to their wage bills by way of pension contributions could tip them over the edge."

Several countries already have mandatory pensions but only one, Chile, exempts employers from making contributions. Under sweeping economic reforms introduced after a coup d'etat in 1973, General Augusto Pinochet forced all Chilean workers to contribute 10% of their salaries into a pension scheme.

Last week, minister Brennan published the Pension Board's findings on how mandatory pensions might work in Ireland. The board proposed contributions of up to 15% of earnings, with the burden split between workers, employers and the exchequer.

But the plan is bitterly opposed by the employers' body Ibec, which opposes any move towards compulsory saving for retirement. "In a dynamic, competitive economy like Ireland, the government needs to encourage, not compel, savings behaviour, " said Ibec director of policy Danny McCoy. "This is clearly best pursued by building on the current voluntary approach to pension provision."

While O'Mahoney shares Ibec's opposition to compulsory employer contributions, he believes mandatory pensions may be the only way of tackling the big shortfall in retirement savings.

"We have to start providing for pensions now or else we're burying our heads in the sand, " he said. "Whether that's through mandatory or voluntary pension saving, we can't get away from the fact that we have to start now."

If the government rejects the idea of mandatory pensions, O'Mahoney said, workers would still be forced to save for retirement through higher taxes.

"If we do nothing, the next generation will have to pay the cost of our decision to consume all of the wealth made by this country in recent years, " he said. "That's neither fair nor equitable."