The union's general secretary has asked Steve Webb, pensions minister, to press the Pensions Regulator to issue new guidance to schemes on how to handle the reduction in gilt yields that has followed successive waves of quantitative easing.

'Quantitative easing' is the policy pursued by the Bank of England to stimulate economic activity by buying up government bonds from banks, which in theory can then lend the proceeds to business and consumers. Last week the Bank decided to boost the programme by another £50bn.

In his letter, Paul Noon says the demand for UK gilts has reduced returns to investors by about 1 per cent. "It has been estimated by the Pensions Protection Fund that this has increased defined benefit scheme deficits across the UK by as much as a third," he said.

This essentially temporary phenomenon has potentially serious consequences for pension schemes, their members and employers, said Noon.

Employers are likely to close schemes with large deficits, and money that companies can ill-afford will have to be diverted to repair those deficits, said Noon.

The regulator has acknowledged the problem, and promised to issue new guidance to schemes in April. This won't be soon enough, says Prospect, pointing to a number of major revaluations in the pipeline like the BT scheme for which guidance in April would be too late.

Calling for 'pragmatic' guidance, Noon added: "We believe this would be in the interests of all parties, including the government. There is no economic or political benefit to be had from a situation where the UK's DB pension schemes are collectively judged to have far greater deficits than any pragmatic and long-term assessment could justify."