New tax limits have seen the pensions of FTSE 250 executives plummet by a fifth, new research reveals.

An LCP survey shows that the average remuneration package of a FTSE 250 exec fell 20% since 2010 and now stands at £68,000, down from £87,000 two years ago.

The tax limits on pension savings introduced in April 2011, which capped the annual pension allowance at £50,000 and lifetime allowance at £1.5m, are behind the drop, LCP said.

The new fiscal landscape of reduced tax allowances has led companies to move away from higher-value final salary pensions and offer smaller, more flexible pension compensation, which fuse an element of defined contribution with cash supplements.

Such flexible pensions are now set up for 20% of FTSE 250 executives, up from just 3% in 2010.

But one in three executives now have annual pensions savings that exceed the annual allowance of £50,000, dramatically increasing their tax payments.

LCP partner and report author, Mark Jackson, said: 'The Treasury has achieved its aim - in the old days executives got tax relief on all their pension compensation, but now they are actually paying tax on it.

'A FTSE 250 executive who cannot shoehorn their pension savings into the new limits is paying £35,000 a year in tax.'

The pension cost to the employer for the average FTSE 100 executive is three times that of his FTSE 250 peer, standing at £225,000 per annum.

LCP last carried out its FTSE 250 Executive Pensions Survey in 2010.