A member of the Pensions Authority has raised the prospect of the State pension being scrapped when a new national scheme is rolled out.

In a new report, Fionnuala Ryan said the Government could phase out or abolish the €238-a-week contributory pension when a scheme in which workers are automatically enrolled is set up.

But the report on the feasibility of the new scheme, co-written with DCU professor Liam A Gallagher, warns that a high contribution of 15pc of wages would be necessary to make up for the loss. Otherwise, people would be left without a decent retirement pot. The contribution could be split between workers, their employer and the Government.

Taoiseach Leo Varadkar has promised the first members of the new national scheme that is designed for workers with no pension bar the State one will be enrolled in 2021.

Although workers will automatically become members, they can opt out. The Government has not made a decision on the value of the contribution that will be made, or the financial incentives it may offer.

"A potential option for the Irish Government is to wind down or remove the State contributory (or old-age) pension as the auto-enrolment scheme gets rolled out," said the report.

"If the Irish Government was thinking of phasing out the State contributory (or old-age) pension and using the auto-enrolment scheme as the sole source of pension income, then a contribution rate of nearly 15pc would be required to achieve the target of 65pc of average earnings at retirement." Average earnings stand at €36,792.

However, the Department of Employment Affairs and Social Protection insisted it did not plan to get rid of the pension.

"The Government has previously confirmed its position that the State pension is, and will remain, the bedrock of the Irish pension system," it said in a statement.

"The department wishes to make it clear a winding down or removal of the State pension (contributory) has not and is not being considered.

"The reference to such an option, in an unofficial research paper, should not be misconstrued in any way as an indicator of a public policy direction," it added.

A spokesman at the Pensions Authority said the views expressed in the report were those of the authors, and not necessarily those of the authority.

The report, published in an academic journal, said the credit crisis had highlighted the vulnerability of the current pension and old-age benefit system in Ireland.

Irish Independent