By Laurence Fletcher

DUBLIN (Reuters) - The Irish government said on Sunday it is closely monitoring the state of pension funds and is preparing long-term plans for the sector, after a newspaper reported the government expects some schemes to collapse.

The Sunday Tribune reported that a memo sent by minister for social and family affairs Mary Hanafin said a number of high-profile pension schemes are expected to collapse as Ireland's total pension deficit reaches 20-30 billion euros (17-25 billiion pounds).

A spokeswoman for the minister declined to comment on the paper's report of the memo, but in a statement on Sunday Hanafin said the government was preparing a long-term strategy for the sector.

"These are turbulent and difficult times for money markets where most pension funds are invested. Pension fund managers have yet to report on their funding standards to the Irish Pension Board, but in public comments they have indicated that funds are subject to market fluctuations," she said.

"The government is continuing to closely monitor the situation and is preparing proposals on the long-term strategy on pensions following the submissions made to the Green Paper on Pensions earlier this year."

The Sunday Tribune said tens of thousands of Irish workers could see their pensions wiped out in the next six months, according to the document, which it said was sent to the government within the last week.

Defined benefit pension schemes are estimated to have lost one-third of their value in the last 12 months, the paper said.

The spokeswoman declined to comment further on the report.  Continued...