IRELAND - Pegging defined benefit schemes' liabilities to Irish bonds instead of German and French bonds could significantly ease the burden of underfunding, said Aon Hewitt.
Although bond yields have increased following their sharp decline in August, German bond yields are still far below their levels at the beginning of the year offsetting the benefits gained from the rally in the equities markets, said Betty O'Reilly, senior investment consultant at Aon Hewitt.
"If the recently announced review of the funding standard leads to pension liabilities being measured by reference to Irish bond yields, the pressure would ease significantly given the current risk premium priced into Irish government bonds," said O'Reilly.
In October, Irish pension funds rose by 1.2% in October and 7.1% since the start of the year, according to the Aon Hewitt Managed Index.
O'Reilly said: "Equities have rallied over the last two months as investors anticipate that the U.S. Federal Reserve will announce a further round of quantitative easing in November. With a decision expected tomorrow, market reaction will reveal investors' level of confidence in the U.S. economic recovery."
The eurozone was the strongest performing market, returning 3.75% over October, said Aon Hewitt.
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.