UK - The aggregate pension deficit for FTSE 350 companies is actually higher than it was a year ago, despite an estimated £20bn (€24bn) in company contributions, according to Mercer.

According to the latest Pensions Risk survey, the aggregate IAS19 measure for FTSE 350 deficits stood at £81bn - equivalent to a funding ratio of 86% - at 31 March, compared with £82bn at the end of February.

This slight fall in liabilities was mainly due to an increase in corporate bond yields - used to value the liabilities - resulting in a small decrease in liability values.

These results were offset by a small reduction in asset values - to £490bn as at 31 March. As a result, the funding ratio and deficit remained broadly unchanged over the month.

However, FTSE 350 companies' DB pension schemes still face important volatility in equity markets, affecting their funding position, the consultancy said.

Ali Tayyebi, senior partner and pension risk group leader at Mercer, said: "Corporate bond yields went up for the first time in months, and it is therefore the first time in a while we have seen a small reduction in liability values.

"There has been reasonable calm over funding positions during the month, although the equity market falls over the last few days of March are a reminder that continued economic uncertainty may well mean continued volatility in funding positions as we go through the year."

Adrian Hartshorn, another partner within the financial strategy group at Mercer, said pension schemes and their trustees would do well to look into de-risking strategies.

"The £17bn growth in the deficit over the last 12 months comes despite the payment of an estimated £20bn by companies in contributions," he said. "This highlights the potential downside of running a mismatched investment strategy.

"Even in this period of low interest rates, there remain attractive opportunities for companies and trustees to reduce risk - either through seeking some attractive investment opportunities or through managing the liabilities."