The Pensions Board has said it intends to review the rules governing the investment of staff pension funds in the financial services sector, to see if further restrictions are needed.

The issue of self-investment remains on the board's policy list for 1999, according to its chief executive, Ms Ann Maher. "We will look at it to see if we need special restrictions," she said.

Yesterday, the Consumers' Association of Ireland (CAI) said it was concerned about the regulation of the pensions industry following an amendment to legislation last year, allowing companies in the financial sector to invest staff pension schemes in their own funds.

The CAI wants the Government to revoke the legislation, which was introduced in December 1998 at the request of the Pensions Board. The CAI describes it as an "unwarranted and preferential amnesty on self-investment in the financial services sector" and says it raises serious concerns.

However, the Pensions Board said there had been widespread confusion - and different legal opinions - about what constituted self-investment under 1993 legislation on the issue. It had received a number of approaches seeking clarification and had undertaken a consultation process involving regulatory bodies such as the Department of Enterprise and Employment, the Central Bank and other interested parties.

The board decided the legislation should be amended to exclude unit-linked funds and deposits. However, some of the views received during the consultation process favoured a more restrictive approach to self-investment for financial services companies, so the board committed itself to considering the regulatory treatment applicable to such schemes in the longer term.

The CAI is concerned that allowing such investment creates an unacceptable level of risk for employees in the event of employers running into serious financial difficulties. "In such an event, if the pension assets also form part of the balance sheet of the employer, a worker could be out of a job and out of a pension scheme," says Mr Eddie Hobbs, CAI finance spokesman.

The CAI's concerns are echoed by the Manufacturing, Science, Finance (MSF) union, which represents 9,500 workers of the nearly 50,000 employed in the financial services sector.

"Segregated pension schemes are separate from the normal fund and balance sheet of a company. We would be concerned if there were any implications for or interference in this," said MSF national secretary Mr Jerry Shanahan. However, the Irish Association of Pension Funds (IAPF) said it believed the CAI was being alarmist. "This was not an amnesty, it was not a charter for self-investment," said IAPF chairman Mr Tom Finlay. There had been no change in the rules governing self-investment, he continued, only in the definition of what constituted self-investment.