IRISH Life the country's largest pension provider has called for a radical overhaul of pension legislation to accommodate changing work practices in Ireland. The company has announced it intends to campaign for the changes.

The company, which has been undergoing a major restructuring within its pensions division, including the creation of a new indexed pension fund, wants the Government to allow for more flexible and portable pensions for the age of retirement to be lowered to 50; for existing funding ceilings to be raised to 45 per cent for the self-employed and to allow fur AVC contributions to be made outside existing company funds and for up to £3,000 to be contributed to AVC's without approval from pension trustees or the Revenue Commissioners.

In its statement, Irish Life has endorsed the views of an increasing number of pension providers and analysts who: believe that because of the strains being put on State pension schemes and the reluctance of many employers to offer defined benefit pensions, employees as well as self-employed people should be allowed the option of contributing to a personal pension plan.

Under such a system, says Irish Life, employees who moved jobs could maintain their personal plan while avoiding the costs and charges associated with switching back and forth into occupational schemes. It would also allow employers to make contributions.

The merits of extending the limit on pension contributions is something that accountants and other financial advisers have been calling for a number of years.

The 1996 Finance Bill raised the percentage of earnings which may be invested from 15 per cent to 20 per cent for those over age 55 but Irish Life claims its experience is that "many people don't start thinking of pensions until they are 40". The contribution limit means that the average self-employed person ends up with a pension that is just 21 per cent of their final year's earnings, says the company.

Increasing the limit to 45 per cent would result in better retirement provision.

Changing the rules which dictates the way in which AVC's operate would certainly benefit companies like Irish Life, but there is also considerable merit in the argument that contributions of up to £3,000 should be exempt from Trustee or Revenue approval.

Finally, Irish Life's call to allow employees to take out an AVC that is not invested with their company's corporate pension fund also deserves serious consideration since it allows a greater diversification of investment and risk.