Positive steps have been made to address pension deficits through the scheme funding regime, and clearance activity is on a downward trend, latest Pensions Regulator data shows.
The watchdog's report - which analysed recovery plans and clearance applications received between September 2005 and September 2007 - found scheme funding levels had improved, trustees had strengthened mortality assumptions, and average recovery plan periods had reduced.
But it warned economic factors affecting recovery plans received over the next year would be "very different".
It said it expected trustees to keep existing recovery plans under review - and to keep a watch on the strength of the employer covenant.
The regulator also said schemes should put less weight on FRS17 as a funding measure - as it said higher corporate bond yields had led it to "diverge" from other measures.
Pensions Regulator chairman David Norgrove explained: "Scheme funding improved between 2005 and 2007 but current economic conditions are far more difficult.
"Trustees should not over-react in the face of the downturn, but should ensure they are active and alert to potential changes in the health of the sponsor, and to the funding level of the scheme.
"In responding to short-term cash flow difficulties trustees should first consider back-end loading recovery plans. Where valuations show a much larger deficit, then, as we said in our October statement, this may result in longer recovery plans being proposed. We will of course keep our approach under review as the situation develops."
The regulator's report revealed average assumed expected age at death for a current 65-year-old male pensioner increased from 85.3 years in valuations submitted in the year to September 21, 2005 to 86.0 years in valuations submitted in the year to September 21, 2006.
It said weighted average recovery plan periods reduced from 9 to 6 years over the same period.
The TPR also revealed full buyout business totalling £8.2bn was reported in the year to September 30, 2008 - almost 6 times the level for the previous year, but still less than 1pc of scheme liabilities.Professional Pensions
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