Million of us face paying 15pc of wages into pensions
OECD recommends no opt-out n Contributions should double
UP to one million workers with no pension face the prospect of being forced to take one out for the first time.
The Irish Independent has also learned a key report recommends that the contributions for these pensions should be double the original plan.
Workers, employers and the State should contribute 15pc of salary to the new scheme, it says.
The report commissioned by Social Protection Minister Joan Burton recommends that most of the one million workers with no pensions should be signed up for a private scheme and given no option to leave it. The study -- from Paris-based international think-tank, the Organisation for Economic Co-operation and Development (OECD) -- says the most "effective and least costly" way to deal with the mounting pensions crisis is to force cash-strapped workers to put aside some of their wages to fund their retirement.
At present, six out of every 10 private-sector staff have no work-based pension -- and rely on the state- contributory pension when they retire.
With the number of pensioners set to explode over the next three decades, the taxpayer can no longer afford to keep state pensions at the current level.
This means workers will have to boost their own pensions at a time when they can least afford to do it.
The move will be seen as a tax on middle-income workers who cannot afford to put their own pension arrangements in place.
And employers are likely to baulk at having to stump up money to provide pensions for staff, particularly smaller firms.
OECD officials were commissioned by the Government to tell them how to tackle the country's pensions time-bomb.
Although the Government has yet to make a formal decision on the timeframe and structure for the new scheme, it will be difficult for it to go against the advice of the prestigious think-tank.
The report states that compulsory private pensions are "the least costly and the most effective approach to increasing private-pension coverage".
Ms Burton is known to be in favour of some form of private pensions arrangements for the more than half of the workforce who will only have the state pension when they retire.
She has spoken of a system where those who have no private pension are automatically enrolled in one, but can then choose to opt out.
Up to now, the expectation was that contribution levels would be around 8pc, with workers, the State and employers all making contributions.
However, the OECD is set to recommend that middle-income people over the age of 22, without a private pension, should be automatically enrolled and given no opportunity to opt out.
It says lower-paid people will not have to take up the scheme as they will already qualify for the state contributory pension and the level of their earnings means they would not gain much from having an additional private pension.
Not allowing middle-income earners to opt out is likely to be hugely controversial as many of those in middle-income jobs in the private sector are already struggling to make ends meet.
The OECD is recommending that the level of contributions into the new auto-enrolment system should be double what had previously been outlined in government proposals.
The state pension, which is around ¿230 a week for those who have paid sufficient pay-related social insurance (PRSI), is not seen as adequate for a comfortable retirement. Most workers pay 4pc in PRSI.
There is also concern that just one-eighth of the population is aged over 65 at the moment, but up to a quarter of the population will be over that age by 2050.
The Irish auto-enrolment scheme had been due to come in next year. At Christmas, Ms Burton said she was pressing ahead with the plan, but stressed that it would not be introduced until the economy improves.
She said recently that auto-enrolment would be particularly beneficial for people on low and middle incomes. It would also help those moving in and out of different jobs, who had very little opportunity to save for a traditional pension with their employer.
"With an auto-enrolment scheme, they would be paying a fixed amount relative to their income and the Government would also contribute to that," she said.
"That would mean that by the time they retire, they could look forward to a decent level of pension -- the contributory social welfare-based retirement pension but also an additional amount of savings, which would give them a bigger income in their retirement."
The State first launched a plan for an auto-enrolment pensions as part of the National Pensions Framework in 2010.
The OECD also recommends that workers in defined-benefit schemes should get more of the assets when the plans are wound up. At the moment, pensioners have first call.
OECD official Paulo Antolin consulted widely with people with an interest in pensions in drawing up the report, which will be launched on Monday by Ms Burton and the OECD.
A spokesman for Ms Burton's office had no comment.