Finance directors should urgently check their their companies' pension funding arrangements in case they are ploughing too much into schemes.

Improved performance in the markets has led to an improvement in the value of pension schemes, and businesses might now be wasting money by overpaying into staff schemes that previously faced big deficits, warns pensions experts Hymans Robertson.

'Most pension schemes have experienced significant improvements in their finances over the last six months and if the same FDs were negotiating their pension contributions now, the outcome would most likely be much lower contributions,' said Martin Potter, partner at Hymans Robertson.

'Companies paying more than necessary on pension deficits are in serious danger of harming their bottom line. This is real money and once paid into a pension scheme the prospect of ever getting it back is negligible. Improved funding positions are also a great platform for taking some investment risk off the table and "cashing in some of their chips" as it were.'

Fears have also grown that accounting rules could force pension surpluses to be recorded in the accounts as liabilities.

Further reading:

Pensions fears over over-funded schemes

Employee benefits: pensions