The optimists will promise us carefree retirements full of leisurefilled days in sunnier climes.

They'll also cite the immediate peace-of-mind dividend from the decision to plan for your own retirement. The pessimists will present images of a Spartan retirement eking out a joyless existence on the state pension.

The latest CSO statistics released last December show 55% of workers currently making active provision for their retirement. Most industry experts believe this percentage is too low. They also worry that even those who are saving are not saving adequate amounts for a comfortable retirement.

The most notable feature of this statistic is that it is so high for what is a largely voluntary system. Pensions savings is the honours exam in delayed gratification. It runs counter to human nature to take money from your resources today and invest it for consumption in 30 years or more.

It's not only the 30+ year timeframe that defies our human instincts to maximise our current experience. The products used for pension savings are complex technical structures beyond the financial education of most customers. All of which adds up to one very large act of faith by the 55%.

Achieving this national level of participation is an achievement that should be celebrated rather than bemoaned.

Interesting work in the field of behavioural economics may hold the key to the pensions savings challenge. The US is leading the way in terms of pilot studies in the area of pension savings.

The clear evidence is that most people, when faced with a difficult or complicated financial decision, will choose to do nothing. Fear of making a mistake is the key driver of this response. Hardly Nobel Prize material but inertia is the key force in the pension savings dynamic.

The insights from behavioural economics turn that "do nothing'' response on its head and use it to increase the savings rates.

Employees are automatically enrolled in the pension scheme when they start working with an employer. The "do nothing'' option is to stay in the scheme. Participation rates typically increase from 50% in a voluntary process to well over 80% on this basis.

The herd instinct becomes the decision to continue saving. Importantly, the freedom of choice exists at any time to opt out of the process.

The even more powerful idea is called SMarT or "Save More Tomorrow".

Here, the employee commits in advance to increasing their saving rate by 1% or 2% each time their salary increases for the next five years. Take-home pay never falls in the process.

Agreed up front, it increases the savings rate from a modest 5% of salary at enrolment to a very impressive 15% of salary in five years' time. "Save More Tomorrow'' is built on the human nature principle that we'll agree to anything difficult as long it's in the future.

Another key lesson from the studies done in this area is the need for product providers to simplify the products and choices they offer to customers. There is a fallacy that ever widening choice is a good thing. When we are confronted with too many choices we tend to hit the "do nothing'' button. It's the rabbits-in-theheadlights response.

A simple supermarket experiment illustrates this point perfectly. Two jam tasting displays were set up.

One display stand had six varieties of jam. The other had 24 varieties. As you might expect shoppers were more likely to stop at the 24variety display. But, faced with such an array of choices, only 3% of shoppers made a purchase. This compared to a purchase rate of 60% at the sixvariety display.

The same principle applies to pension products and in particular the array of investment options they offer. A hundred different investment options from Japanese equities to North American forestry may seem very appealing but are likely to achieve the "Do nothing'' response. What providers need to offer are a small number of different and well-explained investment options, generally along the lines of low, medium and high-risk tolerance. Providers have a big responsibility around presentation and explanation here, as another experienced reality is that 90% of consumers will plump for the middle option in any such range.

The other great clarion call in the pensions savings debate is the need for more education . . . more financial literacy. Except that in complex areas such as longterm pension savings education is rarely effective.

Most people do not have the motivation required to get into the issues in detail. It's a chicken and egg situation whereby you can't engage people if they don't have a pension but they won't have a pension if you can't interest them in the first place.

Of course, everything changes when they actually have a pension. Irish Life Corporate Business finds that the most effective way to increase savings is to get the pension started first via the auto-enrolment feature.

Any subsequent investment in education then has an engaged and receptive audience. Those not yet in the pension scheme are hard to engage but those who are show very high levels of interest in the various elements of long term savings.

Ultimately, the answer to the pension savings challenge is a combination of nature and nurture.

Human nature can be used to increase the first-day enrolment rates for employer pension schemes.

It can also be used to drive up the savings rates over time. All of this can then be nurtured with a sustained investment in financial literacy by pension providers. The end goal of a society in control of its financial future is achievable.

Donal Casey is CEO of Irish Life Corporate Business