Representatives of the pensions industry have expressed concerns that the SSIA-style pensions and changes in tax relief for contributions proposed by the Commission for Taxation may ultimately reduce overall retirement savings levels.

The commission is going to recommend the government introduce SSIA-type pensions for those on lower incomes, according to a report last week in the Irish Independent.

To match the €1 state top-up for every €2 in contributions in this scheme, the commission is also proposing a flat 30% rate of tax relief on all existing pensions.

The pensions industry has long warned a change like this will cause higher earners, who currently get 47% relief, to reduce contributions or get out of pensions altogether.

"Anything aimed at increasing participation is to be welcomed," said Frank O'Dwyer, chief executive of the Irish Association of Investment Managers, whose members include Ireland's largest pensions providers. "But we have to be careful that in broadening coverage, we don't reduce the adequacy of provision."

Jerry Moriarty, director of policy for the Irish Association of Pension Funds, said proposed changes would be welcome if they were simply an "addition" to the current system. "It would be better for people who currently get no relief or who are on the lower 20% rate, but if it is a replacement for the current system, we would have a serious problem with that," he said.

One pension consultant contacted by the Sunday Tribune said while the commission's plan might encourage more people to save, it would make less sense for people paying the higher rate of tax to continue funding their pensions: "There is massive concern the government is going to make a short-term decision and leave us in a big hole."