For five years U.S. private equity funds have lived with uncertainty about their obligations to fund the pensions of their portfolio companies, but a new ruling in Massachusetts offers hope that they could get off the hook.

In 2007, Pension Benefit Guaranty Corp., a U.S. federal agency that seeks to protect pension benefits in private-sector defined benefit plans, ruled that pension funds that own 80 per cent or more of a portfolio company could be liable for plan under-funding in the event of a bankruptcy.