The Government's decision to delay changes to how pension funds report their balances and liabilities has been welcomed.

The decision was welcomed by experts at the Gatwick office of accountancy firm KPMG.

The firm said its own research found 40 per cent of the UK companies cited the impending introduction of FRS 17 and its expected impact on company balance sheets as a major concern.

Pensions are costing business 15 per cent or more of payroll and costs year-on-year have become more volatile.

The fall in both international and UK stock markets following the Worldcom scandal would have resulted in deterioration of an already-troubled final salary pensions funding position.

Pensions partner David Fairs said: "Both employers and employees will benefit from this reprieve.

"In the current economic conditions, the funding position under FRS 17 looks particularly poor.

"Forcing companies to take a snapshot view of their solvency position in these circumstances is likely to give an overly-pessimistic view of the company's financial commitment to its pension fund.

"Deferral of full adoption of the standard may mean some companies will reconsider closing their final salary schemes while they await the Government-initiated simplification review by Alan Pickering, chairman of the European Federation for Retirement Provision."