IRELAND – The Pensions Board has relaxed its stance on pension funding – a move the Irish Association of Pension Funds has welcomed.

The regulator has now amended guidelines under which trustees can apply to extend the time pension schemes have to make good any asset shortfall.

Section 49 (3) of Ireland’s Pension Act allows the regulator “to specify a later date than the effective date of the next actuarial funding certificate where certain specified conditions are met”.

The board set out the guidelines in August, and they came into effect on December 5. Whilst its policy is to only consider 10-year extensions, it may now consider applications for longer periods in exceptional circumstances. The board said that each individual application would be considered “on a case by case basis”.

The Irish Association of Pension Funds said it welcomed the move “to introduce greater flexibility for pension schemes which find themselves in difficulties due to prolonged falls in equity markets over the last number of years”.

“On behalf of pension schemes and their members, IAPF have been concerned about the difficulties facing schemes and sought some additional flexibility to avert the possibility of benefit reductions or scheme closures.”

IAPF chairman Gerry Ryan said: "The problem associated with setting a short time frame 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.”