Companies are making little progress in reducing the financial burden of their pension obligations according to analysis by PwC, which shows that FTSE 350 companies' ability to support their defined benefit (DB) pension obligations has declined since the financial crisis began.

PwC's Pensions Support Index tracks the overall level of support provided to DB schemes out of a possible score of 100. The index currently stands at 75, just a one point improvement since June 2012 and well below the 88 level achieved pre-recession in early 2007.

The firm says its pensions index been flat since September 2011, as lower growth, higher inflation and low interest rates have put companies sponsoring DB schemes under significant financial pressure.

Jeremy May, pensions partner at PwC, said: 'Companies sponsoring DB pension schemes need to work harder to find returns in this new economic environment. This includes looking to non-traditional asset classes to achieve the required return, while meeting the schemes' cash requirements over an appropriate timeframe. Companies also need to be prepared to explore a wider range of ideas, such as longevity hedging, asset swapping and cashflow buy-ins to meet the schemes' needs.'

PwC calculates that the position for the FTSE 350 companies would have been worse, if the European Commission had not dropped the funding aspects of the proposed IORP II pensions directive. It says that if these plans had gone ahead, the pensions support index would have dropped to a score of 60.