IRELAND - The current obligation on defined benefit (DB) pension schemes to be 100% funded is no longer sustainable, the Irish Business and Employers Confederation (IBEC) claims.
IBEC director Brendan McGinty said: "It is time that the government and the pensions board faced up to the serious difficulties that defined benefit pension schemes are facing."
The latest pension industry estimates revealed three out of four DB schemes could now fail to meet the funding standard, compared to just one in four at the end of 2006.
McGinty claimed the problems facing employers was being exacerbated by poor invested returns, declining asset values and longevity.
And he explained employer contributions have had to rise significantly in recent years to simply meet the "draconian discontinuance funding standard".
He said: "Defined benefit pension costs are increasingly regarded as a 'bottomless pit'. The funding standard and other regulatory requirements are leading to the demise of defined benefit pensions."
McGinty added the IBEC believed that continuing the current wind-up standard was only "hastening the flight" from DB scheme provision.
Meanwhile, data from Aon Consulting has found that the 200 largest privately-sponsored UK pension schemes had lost over £45bn (US$79bn) since the end of August.
The consultant said the devastating effects on the financial markets had a knock-on effect for final salary pension schemes.
Aon Consulting head of corporate solutions Marcus Hurd said: "Unlike many other institutions, many final salary pension schemes have time on their side. With the exception of those sponsoring companies facing insolvency, the companies concerned will be able to form long term financial plans to remedy the problem.
"That said, in light of the new financial environment, many companies will wish to review their approach to pension scheme financing and risk mitigation."
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.