IT'S barely a wet month into his two-year term as chairman of the Irish Association of Pension Funds (IAPF), but Patrick Burke is ready to start shifting the foundations of retirement savings with what he calls a "radical proposal" to equalise state support between public and private sector pensions provision.

On yet another grey summer's day in Dublin, the relatively green Burke, who parlayed 10 years as a corporate lawyer in professional trustee consultancy services . . . five of them as a trustee . . . into a role as director of investment development at Irish Life Investment Managers, is looking for a solution to what the IAPF sees as a fundamental inequality at the heart of Irish society. From the top floor of his offices in Beresford Place, just beside Liberty Hall, the view is as expansive as it is expensive.

Burke's idea is to create a state annuity fund that would transfer mortality risk away from individuals onto the state and guarantee a pension outcome up to a certain level for all workers . . . not entirely unlike a nationalised version of the hybrid scheme the Labour Relations Commission recommended for AIB in May, except that taxpayers are the ultimate guarantor.

"You get intergenerational support. . . it allows [the state] to take a mortality assumption and smooth it out over a much longer period than an insurance company that has responsibilities to shareholders, " Burke says.

"It sounds something like the VHI, I suppose. You create a reserve, except you get what you pay for on the the day you bring the fund across. You have your pot of money, you go to the State and you get your pension from that pot of money."

Burke acknowledges that the department of finance is unlikely to leap at the chance to transfer the pension risk of the entire Irish work force into Government Buildings, but he's holding it out as a way to redress what Chambers Ireland (among many groups with a dog in this fight) has estimated to be an average 1m disparity at retirement between public and private sector pension benefits.

And, in the end, the disparity is as much about risk and costs as it is about outcomes, he says.

"I would hate to be misinterpreted. Public sector pensions in the main provide a good benchmark. At the same time in the private sector there has been a fundamental shift in the cost of providing benefits . . . negotiated by new investment strategies, alteration of benefits and a rebalance of who is paying contributions.

"We are overdue a process by which costs and risks are identified and distributed between the state and beneficiaries, where they're evaluated and remedial action is applied where necessary."

If it's a little bit odd to hear an executive at a major financial services company advocate the collectivisation of assets because "it's what's right for us as a society" . . . wait, there's more.

The state annuity fund is just one plank of the IAPF's three-point equality platform, which also addresses the gender imbalance in pension coverage and unique treatment of the mostly PAYE members of group defined contribution schemes, who are limited in their choices once retirement comes around.

"Within these schemes there's an inflexibility in that you must take an annuity when you come to retirement, " Burke explains.

"You're the only category in the Irish labour force that is required to do that. The public sector doesn't have to buy an annuity, people in defined benefit schemes don't have to, the self-employed, 5% directors, those in PRSAs don't have to.

"Yet we have a substantial number of people in group defined contribution schemes and we tell then that on the day you retire you must be subjected to whatever long term interest rates are in the market on that day or whatever happened on equity markets that day.

"We ask them to take all the risk up to that point and then we say to them 'you can't take any more risk'."

Burke says this kind of rigidity works poorly in an environment where defined contribution is becoming the norm . . . meaning savers need more flexibility because life expectancy is rising but there is no certainty over benefits. Locking up the least certain pensions in annuities is perhaps a little overprotective, he suggests, especially where the state doesn't seem eager to take on more financial responsibility for over-65s.

Again, it's a matter of risks and costs as well funding. The theme emerges again . . . somewhat less controversially . . . when Burke turns his attention to the poor pension coverage.

According to a March report by the Pensions Board and the National Women's Council, men are nearing 60% coverage while women are languishing at about the 50%.

The usual reasons apply: more women work part-time and more women have fragmented career patterns during child-bearing years.

More pensions portability might be a solution, but Burke is sceptical.

"People who have nothing don't have any portability problems, " he quips. "To get to portability, you have to achieve the objective of simplification. We've got so many different pensions vehicles, we've lost the point."

Amusingly, Burke's decryption of the alphabet soup of ARFs, AVCs and PRSAs involves another acronym: SSIAs. It's not the first time someone has suggested the government simplify retirement savings by transparently offering matching funds (ie free money) as a reward consistent investment within a set of easy-to-follow rules. After all, SSIAs had a huge take-up and managed to achieve two important policy objectives: take the air out of inflation and instill a savings habit in the gluttonous Celtic Tiger. Check and check.

But Burke's got a new survey to back up the case this time. In the services sector . . . an area with notoriously poor pension coverage . . .86% of workers would start a pension if there was a euro for euro SSIA-style guarantee, according to the IAPF research, which was released the first week of the month. Against that figure, 60% were unaware of how the current pensions tax incentives . . . which give relief at the marginal rate . . . applied to them.

Overcome this knowledge gap, says Burke, and you'll increase coverage. His survey says four in 10 workers with no pension actually took out an SSIA, after all.

"You had an SSIA scheme that really worked a treat, " he says. "It was transparent, easily understood, considered to be free money and it encouraged people to save. If you had that style system across defined contribution, it would improve things."

One way to cut this particular knot that Burke doesn't bring up is compulsory pension provision . . . or, as Pensions Board chairman Tiarnan O'Mahoney has advocated, "soft mandatory" pensions with an opt out for those who want different arrangements.

It sounds like one equal system for all, but Burke has misgivings.

"Our worry is that if you go down a compulsion route, before there is transparency, people will rebel against it and you won't get the additional contributions necessary for adequacy, " he says "You'll just get the statutory minimum and employers coming in will adopt that minimum rather than an average. The mandatory level will become the floor."

Australia is currently trying to adjust its way out of just this problem after introducing soft mandatory in 2001. Now industry is tyring to find ways of supplementing the minimum with sector-wide benefit schemes . . . something Burke advocates is a better place to start from in the first place.

Unfortunately, no other country has implemented anything like the equality utopia the IAPF has envisaged, so there are no successful models out there yet . . . and, in any case, it takes 20-30 years to see measurable outcomes. So Ireland has a chance to be radical leaders in this space.

"You have to change the system first and make the manner in which you get your benefits and taxation the same for everybody."

Roll on the revolution.

CV PATRICK BURKE

Age: 38
Occupation Chairman, Irish Association of Pension Funds; Director . . . Investment Development, Irish Life Investment Managers

Employment background: Corporate lawyer, Mercer Human Resource Consulting 1996 - 2001;
Director, Irish Pensions Trust . . . Professional Trustees 2001 -2006 Education: Rockwell College; University College Dublin, B. Comm; Irish Taxation Institute . . . Qualified Associate; Law Society of Ireland. . . Solicitor FamilyMarried to Pauline. Three children; Lara (7), Paddy (5) and Jamie (3) Hobbies Sailing and Golf