SKY-high charges can gobble up as much as a third of the value of a pension plan, a new report has found.
And most people who are saving for their retirement are unaware of the impact fees and costs have on their fund, the report by the Department of Social Protection concluded.
High costs are particularly a problem for those with their own individual pensions, and those in smaller schemes. These are typically defined contribution pensions.
Some 240,000 people have this type of fund, with the number set to grow as the more traditional defined benefit schemes are rapidly closing.
In extreme cases charges can eat up half the value of a fund if it has been in place for two years or less.
Social Protection Minister Joan Burton, who has responsibility for pensions policy, said many people were shelling out more for a pension than they should because of high fees.
She said it was not usual for one-third of the value of a retirement fund to be eaten up by charges.
Someone who saved €250 a month from the age of 35 could end up with a fund of €200,000 after 30 years. This would leave them with an annual pension of €10,000 in retirement, if there were no charges.
But an average charge of 2.18pc a year would reduce the fund by €62,000 and this would leave a pension of just €6,900, according to the report.
The 290-page report found there are a wide range of charges, some of them hidden.
But they compare favourably with the typical charging structure in Britain.
The Irish Association of Pension Funds, which represents trustees, said the research showed the relative competitiveness of pension charges in Ireland.
Yesterday, pensions experts accused the Government of releasing the report in an attempt to deflect attention from its plans to reduce tax reliefs . This will effectively cost the typical worker paying into a pension more than €800 a year, and impact on 550,000 workers.
Ciaran Phelan of the Irish Brokers' Association said: "It appears to be an attempt to discredit the role of private sector pensions and divert attention from the Government's recent actions -- which include dipping into the private sector savers pension accounts to the tune of €900m, and threatening to cut pension tax relief to the point where it's simply uneconomic for people to save."