IBEC, the group that represents Irish business, today reacted to the publication of the Government's National Pensions Framework.

IBEC Director Brendan McGinty said: "Mandatory employer pension provision will fuel wage demands, particularly in labour intensive industries and small employers. These are businesses already struggling to survive.

"It makes sense to increase gradually the State retirement age in order to help ease the burden of providing pensions. IBEC supports a phased increase of retirement ages by voluntary agreement between employers and employees.

"Employers are struggling financially to provide defined benefit pensions. Market losses in 2008 were particularly savage and, together with having to provide for longer retirements, this has meant that the majority of defined benefit schemes are currently insolvent.

"IBEC welcomes the suggested changes to the funding standard. These may have merit providing they enable schemes to survive the current economic crisis.

"In relation to proposed tax relief changes, there is no evidence that a reduction in the personal tax relief on pension contributions would improve pension coverage for those on lower incomes. Tax relief on personal pension contributions should remain at the marginal tax rate."