SWITZERLAND - Towers Watson has found that the funding level of an average Swiss 'benchmark' pension plan has dropped by around 9 percentage points quarter on quarter.

This marks the second quarterly drop in a row under IAS19 accounting rules, according to the consultancy's quarterly Swiss Pension Finance Watch.

Over the third quarter, the Pension Index - which tracks the liabilities and performance of a typical benchmark pension plan - dropped from 96 points to 87.2, well below the 98.4 points the index started with at the beginning of the year.

However, John Carter, senior consultant at Towers Watson in Zurich, pointed out that the index was still well above the level during the financial crisis when it stood at 82.3 points at the end of March 2009.

"This is down to the fact that, today, there are more assets available than at the height of the last financial crisis, which is more than compensating the increase in liabilities," he said.

In the third quarter, both a reduction of discount rates as well as a low return on investments contributed to the drop in the funding level.

Carter stressed that these findings applied to a benchmark pension plan with a fixed asset allocation and that those Pensionskassen that had reduced the share of risky assets since the financial crisis would have cushioned the blow of return-related effects.