MORE than half of all employees will have no pension from work when they retire, according to a new report on pension trends from the Economic and Social Research Institute. There has also been a sharp decline in the number of people covered by pension, schemes over the last 10 years, the report says.

The findings contained in the ESRI report have been described as worrying by the Minister for," Social Welfare, Mr De Rossa.

The report, commissioned by the Department of Social Welfare, and the Pensions Board, found that 54 per cent of all those in work in 1995 had no occupational pension scheme. This will leave many relying on a state pension which will not maintain their standard of living.

The Department of Social Welfare and the Pensions Board have set up a National Pensions Initiative to promote debate. It will produce a consultation document in January 1997. Concrete proposals to improve pensions coverage will be made by summer next year, according to the Minister. "We are trying to ensure that there is no pension poverty," he said.

Further study will also focus on comparisons with other countries. In Europe, the Netherlands was highlighted as having extremely high coverage - around 85 per cent - without any compulsion.

According to Ms Anne Maher, chief executive of The Pensions Board, the Netherland's system features industry schemes with collective bargaining and tax encouragements, as well as good partnership.

Ms Maher added that she finds it hard to see how employers' pension contributions would not be part of the current negotiations for a new PCW.

One of the key areas the recommendations will focus on will be the provision of pensions to part time, particularly female workers. This could involve an element of compulsion for employers in this area, the Pensions Board admitted.

Ms Maher added that this could come from Europe, under new EU rules already under active consideration.

The report found that coverage varies widely between men and women, as well as types of job. Only 43 per cent of female employees have a pension, while only 11 per cent of part timers' are covered.

Ms Maher pointed out that almost 100 per cent of those working for large companies have pension cover. This falls to 40 per cent of those working for medium sized companies and only 10 per cent of those working for small companies.

Public sector employees have the widest coverage at 83 per cent, with male employees following at 58 per cent. There is a marked difference between the coverage of highly paid men and those in less well paid jobs.

The Minister said he did not believe that this was related to the higher tax relief the well paid receive. Then, he insisted, the better paid merely have more disposable income to make pension contributions.

Only 27 per cent of the self employed are members of a pension scheme. Mr De Rossa said many self employed people felt their business was their pension but this may not always fund adequately for their retirement.

I would have thought one of the first things you'd do if you become self employed would be to take out a pension," he said.

The structure and reliability of, pensions are also changing. More schemes are now being set up which depend solely on the amount contributed - so called defined contribution schemes. Traditional defined benefit schemes, on the other hand, guarantee a set percentage of salary payable as a pension.

With the defined contribution schemes there is no guaranteed return and the pension will depend on the amount invested, how world markets have fared and how good the investment manager is. In these cases it is difficult to know whether or not the amount of contribution being paid in is adequate.

Almost 70,000 employees - or nearly one in four private sector employees of the total - now belong to defined contribution scheme. Part time employees are the most likely to be in this category and the numbers are increasing,

The report also found that only a quarter of private sector schemes have their benefits increased in line with the inflation. And even this can lead to dramatic falls in standards of living, as wages generally increase far faster than the consumer price index, Mr De Rossa said.

Although the Minister was reluctant to pre empt the final report, he said that tax incentives are likely to be an important part of any initiative to encourage more people into pension schemes.