The country's largest pension scheme, the Construction Federation Operatives Pension Scheme (CFOPS), is to be closed down from July 1st, with members transferred to a new scheme, writes Laura Slattery.

The change will affect up to one in six male workers in the Republic between the ages of 20 and 65. The trustees said the new Construction Workers Pension Scheme (CWPS) would be more transparent, cost-effective and easier to operate.

Under the scheme, members will have their own pension fund to which 7 per cent of their gross salary will be contributed. This contribution will be split between the employer and the employee, with 40 per cent from the worker and 60 per cent put in by the employer.

Previously, employers who complied with the scheme contributed a fixed sum of €21.74 a week, while employees contributed €14.50 from their weekly pay packets. The mandatory retirement age of 65 will be removed to allow for members to retire at any time between the ages of 60 and 70. Scheme members will get a statement each year stating the value of their pension fund and a projection of what it will be worth at age 65. There will also be improved death in service benefits for dependants.

It will take at least nine months to wind up the old scheme. Transfers to the new scheme will be made automatically and members will be notified of the changes.

The introduction of CWPS follows a major review of the old scheme, which started in 2000.

The construction industry has been criticised by pensions ombudsman Paul Kenny, who said last year that employers were systematically failing to comply with CFOPS.

Complaints received by his office included failure to register employees; failure to pay over contributions already deducted from employees' pay; and unethical practices in which workers were forced to pretend to be self-employed.

Union leaders met last year with Minister for Social and Family Affairs Séamus Brennan to discuss "large-scale abuse" of the scheme by construction employers, who are legally obliged to make contributions to the scheme for all workers over the age of 20.

Siptu claimed up to 50 per cent of building workers were not covered by the scheme because of the failure of "cowboy employers" to make contributions. There are now 80,000 workers contributing to the scheme and 7,000 retired members. The membership of around 120,000 workers is deferred.

Oliver Haslette, chairman of the CWPS trustees, said the new scheme would lead to a better pension for future retirees in the industry.