The Pensions Board has moved to allow certain pension funds greater flexibility to address deficits caused by weak investment markets in a bid to avert benefit reductions or scheme closures.
The board has discretion to extend the period during which pension schemes are required to make good any shortfall in their assets to beyond three-and-a-half years.
It has now indicated that whilst its policy is to only consider extensions for up to 10 years, it may now consider applications for longer extensions in exceptional circumstances.
Any extensions are confined to schemes whose funding difficulties relate wholly or mainly to investment market falls.
The Irish Association of Pension Funds (IAPF) yesterday welcomed the development, but said it was clear that extensions would only be granted where a strong case could be made for one.
IAPF chairman Mr Gerry Ryan said it had been examining this issue for some time amid concerns that under pensions legislation, a significant proportion of schemes could have been forced to reduce pension benefits for current employees.
"At IAPF meetings earlier this year it became apparent that pension schemes were struggling to comply with the policy guidelines then applying," he said.
"The problem associated with setting a short timeframe for funding deficits in some pension schemes is that sponsoring employers may be fully committed to maintaining the pension benefits proposed for employees - but unable to increase contributions to the levels necessitated by short-term funding requirements," Mr Ryan said.
The IAPF said it was clear from the Pension Board's guidelines that employers would still be required to fund their pension schemes prudently and trustees would be obliged to keep members informed of any solvency issues.
"In broad terms, the new guidelines issued by the Pensions Board take account of the funding difficulties which the IAPF had highlighted in its recent submission to the board and provide an opportunity for the board to separately consider the nature of the funding standard itself," he said.
"IAPF will be consulting with its membership again prior to presenting its submission on the long-term review of the funding standard to the Pensions Board," he said.
