The State's largest trade union, SIPTU, has given a cool welcome to the Government's proposals on employee share ownership and savings schemes. While SIPTU's general secretary Mr John McDonnell says the Finance Bill "more than compensates for unexpectedly high inflation in 2000", the share options scheme was "engineered to ensure that the better off will benefit disproportionately".

The union's equality officer Ms Rosheen Callender, who is a member of the Pensions Board, is concerned that the new savings scheme could undermine proposals to increase participation by the low paid in occupational pension schemes. IMPACT national secretary Mr Paddy Keating shares her views.

He described the Finance Bill - published on Thursday - as "a lost opportunity to improve future financial provision for those who need it most".

There was "a need to encourage savings so people could make provision for pensions and other needs. But people on benefits or in low paid jobs would not have the money to take advantage of this scheme."

Ms Callender welcomed the savings initiative but she said SIPTU was "very concerned this may have a negative effect on the growth of pension schemes - unless early government action is taken to prevent it".

Following a lengthy consultation process with all the social partners the Government had agreed "the legislative framework for pensions should be reformed and modernised".

A new Pensions Bill would be "designed to encourage people to take out pensions cover, including a pensions vehicle to be known as the personal retirement savings account, or PRSA.

If the PRSAs did not attract the same favourable tax treatment "they will be strangled at birth by rival, short-term savings arrangements that will give no real guarantees of security in retirement and old age", said Ms Callender.