¾ of UK pension funds have experienced more than a 6% reduction in funded levels in 2020 when compared to 2017, according to a review of actuarial valuations of 190 pension funds.
While reviewing actuarial valuations effective March 31 or April 5,it was found that another 25% of the funds, have seen an improvement in funded levels. The remaining half of the funds have seen their funding gaps increase by 6% or less.
Its typical clients, whose funded levels have worsened, could have seen their pension deficit increase by £15 million.
Some sponsors have seen little COVID-19 impact but others are badly affected.
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.
In terms of setting the deficit contribution levels following the 2020 valuations and if affordability is a constraint we recommend making use of all the flexibilities available in structuring recovery plans.