The UK's top 100 companies have a pension deficit of �65bn

Firms could be forced to take out insurance to protect 90% of the value of workers' pensions if the scheme is closed, according to the Financial Times newspaper.

Any insurance could mean a fairer distribution of pension benefits but may place an extra burden on hard pressed employers.

The plans come at a time when many company pension schemes are suffering a deficit between liabilities and assets.

The Department for Work and Pensions would not confirm that the introduction of a compulsory insurance scheme was in the offing.

"I am afraid it is total speculation...we have taken soundings from many different quarters and will reach our decisions sooner or later," a spokesperson told BBC News Online.

Ailing schemes

A combination of falling stock markets and an ageing population has left the pension schemes of the FTSE 100 companies facing an estimated �65bn black hole.

If assets fall below liabilities then employers are duty bound to prop up ailing final salary pension schemes in order to ensure that members are paid their benefits in full.

As a result, many employers have closed their schemes to new recruits, increased employee contributions, or simply wound schemes up.

Under current rules, when a pension scheme is wound up the bulk of the benefits go to retired members, often leaving those of working age with little to show for their savings.

Fairer distribution

The government announced its plans for pension reform in a Green Paper last December.

In the paper, the idea of an insurance policy funded by either lower scheme benefits or increased contributions was not ruled out.

But at the time many industry experts criticised the government for having largely ignored the plight of workers whose schemes face closure.

An insurance scheme based on the American pension industry model would see a fairer distribution of funds to scheme members.

Some UK pension industry bodies recently started to swing behind the idea of an insurance scheme.

Last month, at the annual conference of the National Association of Pension Funds the incoming chairman Terry Faulkner called for the introduction of an insurance scheme.