Ombudsman Paul Kenny has also attacked the accountancy profession for pushing through new financial reporting rules that he says distort the true level of companies' pension deficits.

The ombudsman, appointed by the government to adjudicate on pension disputes, said it made little sense for employers with a high turnover of younger workers to exclude them from defined benefit plans. While these schemes offer potentially expensive guaranteed pensions linked to pay, the benefits are of limited value to job-hopping employees who move on after a few years.

This makes them potentially less costly for employers than defined contribution pensions, according to Kenny.

While these schemes offer no guarantees, employees can freely transfer their benefits, including employer contribution, when they move job.

Kenny made his comments to the annual conference of the Irish Bank Officials Association, which is locked in a bitter dispute with Bank of Ireland over its decision to shut the main pension scheme to new workers hired from last week.

According to Kenny's argument, this could be a false economy because banks tend to suffer from high staff turnover, especially at junior grades.

"A serial early leaver with benefits built up from a bunch of defined contribution schemes will probably be in a better position than somebody leaving a defined benefit scheme after a short period, " Kenny said. "If you've a high turnover of staff, a defined benefit scheme is probably not costing a bean because, when workers leave the company, most of their money stays in the scheme.

The transfer value of their pensions is typically very small, probably little more than a refund of their own contributions with no element of the employer's contributions."

The ombudsman also used his IBOA to launch a stinging attack on the accounting profession for controversial new rules that force companies to recognise huge pension liabilities that might never arise.

"Companies are not allowed to anticipate future profits so why should they have to anticipate future liabilities?"

he said.

The ombudsman blamed the accounting rules for speeding up the demise of defined benefit pensions. "It has introduced huge volatility so that even small changes in the underlying conditions can bring about major balance sheet changes."