Up to €6 in every €10 in pension funds are being swallowed up by fees and charges, according to a new report.
In 2012, a Department of Social Protection report found that charges on pension pots amounted to roughly 2.18 percent each year.
However, a new independent analysis suggests that this figure may be even higher come year's end.
The analysis, provided to the Labour Party, shows that around three percent is deducted from the value of a pension fund annually.
This report's findings are consistent with research from the Organisation of Economic Cooperation and Development (OECD) which found that every 0.25 percent charge for pension fees leads to a 4 to 5 percent decrease in a person’s pension total by the time they retire.
This would mean that, on average, 35-45 percent of peoples’ private pensions are consumed by these pension fees, amounting to hundreds of thousands of euro per person over the lifetime of the investment.
And the longer the pension grows, the greater the effect the fees have on the fund.
By the time some people reach retirement age, they may find that annual fees of 3% have resulted in a reduction of up to 60 percent on their pension total.
The new findings have led to calls for increased transparency around the charges and fees involved with pensions.
Labour finance spokesperson Ged Nash said the analysis highlights "how ordinary people are paying extraordinary sums of money from the pension pot they’ve worked hard to fill over time."
The difference between paying 1, 2 and 3 percent in fees can amount to tens of thousands of euro over the life of the investment.
"What this also means is that the pensions industry is actually eating up a huge chunk of the tax relief available for pension contributions in fees. The State is effectively subsidising the pensions industry to a huge degree."
Mr Nash said that Government, the pensions industry and the Pensions Authority have questions to answer over the issue.
"The first step that needs to be taken is that the pensions industry needs to come clean with its customers about how much their fees are costing them."
He said he would be writing to both Social Protection Minister Heather Humphreys the Pensions Authority in relation to the issue.
"The enormous sums of money involved here mean that this issue needs urgent attention."