The Republic of Ireland ranks joint second in a recent assessment of pension provision across Europe.

According to a European Pension Barometer released yesterday by Aon Consulting, Ireland ranks alongside the Netherlands at number two, and behind only Portugal.

The study compares the pension situation in the 15 countries that were members of the European Union in January 2004 and looks at four key measures: demographics, affordability and sustainability of the State pension, adequacy of the State pension, and the percentage of assets in company pensions.

While Ireland scored highly in three out of the four categories, it performed less well as far as the adequacy of the State pension is concerned.

At a meagre €179.30 a week, the State pension is currently equal to about 37 per cent of the nation's average income. This compares with 48 per cent in the UK and 69 per cent in France.

The survey also showed that Ireland had one of the highest retirement ages in Europe, at 63.1. It ranked fifth for the percentage of older workers - aged between 55 and 64 - in employment, something that is likely to please the Government.

As reported last week in The Irish Times, the Minister for Social and Family Affairs, Séamus Brennan, is currently considering encouraging people to postpone claiming the State pension at the age of 65 in return for receiving larger payments later.

A copy of the as of yet unpublished National Pensions Board report seen by The Irish Times reveals that people who decide not to accept the State pension at 65 would receive a one-third higher pension at 70.

According to the latest figures, some 48 per cent of the Irish workforce is not saving for retirement through a private pension scheme and will therefore be forced to rely on the State pension, the future of which is in question as people live longer and draw on the State's reserves for longer periods of time.

The cost of State pensions is projected to rise from 4.33 per cent of gross national product (GNP) next year to 7.7 per cent in 20 years and to 13.8 per cent of GNP by 2056.