A quarter of U.K. pension funds have experience more than a 6% decline in funded levels in 2020 vs. in 2017, according to a review of actuarial valuations of 190 pension funds conducted by Aon.
While reviewing actuarial valuations effective March 31 or April 5, the firm found that another 25% of the funds, which are all Aon's advisory clients, have seen an improvement in funded levels. The remaining half of the funds have seen their funding gaps increase by 6% or less.
The consultant said that its typical clients, whose funded levels have worsened, could have seen their pension deficit increase by £15 million ($18 million).
Some sponsors have seen little COVID-19 impact but others are badly affected, Matthew Arends, head of U.K. retirement policy at Aon, said in an emailed comment.
"We believe that the priority for schemes is to understand their specific circumstances — of both the scheme itself and of the schemes sponsors. Only then can they determine the appropriate actions for their particular scheme," Mr. Arends said.
"In terms of setting the deficit contribution levels following the 2020 valuations and if affordability is a constraint," he added, "we recommend making use of all the flexibilities available in structuring recovery plans."
