A majority of small businesses predict difficulties with the government's plans to shake up the pensions system, according to a new survey.

Research conducted by the Association of Consulting Actuaries found concerns over the complexity of parts of the proposals.

And there were signs that more companies could rethink their existing pension provisions in order to keep costs under control.

Amongst firms employing 250 or people, defined benefit pensions coverage was found to be in steep decline.

There was also evidence that small firms are 'levelling down' to lower-cost defined contribution schemes.

Some 41 per cent of smaller firms reviewed their pension arrangements last year, with 16 per cent currently undertaking reviews.

And 61 per cent of firms said that the Pension Commission's state pension reforms, which have largely been backed by he government, are "overly complex".

Some 68 per cent said the plans "do not create the clear incentive or understandable base upon which private savings can be built".

There was backing from 88 per cent of firms for more work on the idea of a consolidated state pension, combining the basic state pension and earnings-related second state pension.

ACA chairman Ian Farr said the findings "underscore that businesses and their employees need to see a simple state pension scheme in place upon which to build any second-tier private pension".

"We welcome the commitment in the recent pensions white paper to raise the state pension in line with earnings financed in part by raising the state pension age to reflect improvements in longevity," he added.

"But, for simplicity's sake, a further look is needed at removing the second state pension at greater speed and at ways to reduce means testing to a much lower level than proposed.

"Without swift action here, opt-outs may be high from any national pension savings scheme if those on lower incomes still think state benefits will be lost if they save for a small private pension."

Farr added that firms would be looking to see if the government delivered on its commitment to begin "rolling back regulation and costs".