The intention of the government to consult on the issue of pension deficits have been given public backing by pension lobby groups, who see the announcement as a potential lifeline to struggling defined benefit (DB) pension schemes.

The Association of Member Nominated Trustees (AMNT) has come out in support of the Chancellor George Osborne's confirmation in yesterday's Autumn Statement that the Department of Work and Pensions (DWP) is to begin consultations on discount rate smoothing, but warn that time is of the essence.

Papers released by the Treasury yesterday, said: 'The government recognises that volatility in measures of pension scheme deficits can make it hard for companies to manage their investment plans and attract external funding.

'DWP will also consult on whether to allow companies undergoing valuation in 2013 or later to smooth asset and liability values.'

Janice Turner, co-chair of AMNT, said: 'This has been one of the key campaigns run by the AMNT throughout the two years of its existence and is what long-suffering DB pension scheme trustees have been desperate to hear. The prolonged recession has left trustees and employers facing unprecedented circumstances with deficits so volatile that countless DB schemes have closed and, in some cases, even toppled their sponsor company into closure.

'The result of this consultation could be that billions are wiped away from DB pension scheme deficits leaving companies better able to invest in their own businesses. It could be a lifeline for DB pension schemes and aid the recovery of the British economy. For this reason we hope that those thinking about scheme closure will seriously consider awaiting the results of this consultation before taking any permanent decisions on the future of their scheme.'

Turner warned: 'It is now important, however, that the process should not be dragged out as a stalling mechanism while more open DB schemes close. The AMNT will now be working very hard in the coming months to put forward and argue strongly for a responsible alternative to the current unworkable regulations.'

The Pensions Regulator chairman Michael O'Higgins said he welcomed a 'transparent' consultation, adding the outcomes would need to be carefully worked through.