Pension liabilities at Switzerland’s listed companies are set to increase by 4% over the first quarter, as the continued drop in interest rates both in Switzerland and globally impacted funding, according to estimates by Towers Watson.

The consultancy said the decline  brought funding levels down to around 80% for companies in the Swiss Market Index (SMI), according to the latest Swiss pension risk study.

At year-end 2014, funding levels still stood at 84% based on international accounting standards IFRS or US-GAAP, as liabilities increased by 18% over the course of the calendar year.

Bond yields in Switzerland dropped by around 23 basis points over the first quarter of 2015, while some 10-year bonds from the euro-zone, the US and UK yielded up to 35 basis points less.

Overall, Towers Watson estimated a 25 basis point drop in bond yields in the pension plans, with an average duration of 15 years.

“The continued drop in interest rates increases the incentives for companies to de-risk their pension plans,” the consultancy noted in a press release.

It added the application of IAS19 led to a higher volatility in companies’ accounts compared to the previous year, which could be decreased by taking less risk in the asset allocation.

Last year the average discount rate applied to SMI pension plans stood between 1.9% and 2.2%, according to Towers Watson.

As per year-end 2014, the companies with the highest funding level were Credit Suisse (101.6%), Swiss Re (97%) and UBS (95.8%).