LONDON (Reuters) - Pension schemes have a "relatively limited exposure" to toxic assets, the country's pensions watchdog said on Friday.

The Pensions Regulator also said in a statement it has seen a "limited involvement" in derivative trades with counterparties that are in difficulty."

It urged pension trustees to check that corporate sponsors remain committed to supporting their saving vehicles.

The current volatile markets have wiped out billions of pensions assets. Accounting firm Deloitte estimated that the real pension deficit of FTSE 100 firms amounted to over 100 billion pounds in the middle of October.

"It is good practice for trustees to keep the employer covenant under review," the regulator said.

The watchdog was set up in 2005 to control the pension industry and make sure schemes achieve and retain a fully funded position.

In its note it said that companies sponsoring a pension scheme involved in a recovery plan should discuss the situation with the trustees but it added fewer recovery plans have been filed since its new regime was implemented.

Every underfunded pension scheme in the UK is required to submit a recovery plan to highlight how the deficit will be made good.

In 2005 the regulator implemented a new funding regime where each scheme is assessed separately rather than against the general minimum funding requirement which had been in place since 1995.

(Reporting by Cecilia Valente)