Funding across German corporate pension plans has declined significantly over the second quarter, as Willis Towers Watson (WTW) blamed the impact of the European Central Bank’s (ECB) policies and the UK’s decision to leave the European Union.

According to the consultancy’s German Pension Finance Watch estimates, pension assets across Germany’s DAX and MDAX stock markets remained broadly stable over the second quarter, standing at €237bn at the end of June across all DAX companies.

However, liabilities rose by 7% as a result of a 42-basis-point drop in the actuarial discount rate, to 1.7%, since March – meaning the discount rate has fallen 0.7 percentage points since December last year.

Thomas Jasper, the consultancy’s head of retirement for Western Europe, said: “This decline can be traced, for one, to the interest rate policies implemented by the European Central Bank and the US Federal Reserve but also to the increasing interest in safe haven assets.

“The widening of the ECB’s quantitative easing and the market turbulence triggered in the wake of Brexit has seen interest in AA bonds, crucial for determining interest rates, increase further.”

Despite the market turbulence outlined by Jasper, the consultancy estimated assets within DAX occupational schemes rose to €237bn at the end of June, an increase of 0.7%, while the pension assets of MDAX companies remained stable at €27.8bn.

As a result of the 7% increase in liabilities, WTW further estimated funding across DAX occupational schemes now stood at 55.3% – down by 3.5 percentage points compared with March, while MAX companies saw funding decline by 2.7 percentage points.

The fall in funding levels comes only a few months after the German government amended the discount rate, or Rechnungszins, dictated within the HGB, the country’s accounting law, to allow for rates to be smoothed over a 10-year period to offer the occupational pensions sector some relief in light of ever-lower interest rates.