The overall deficit of defined benefit (DB) UK pension scheme fell by £80bn to £210bn during April 2020.
The fall reverses a £60bn increase in March, following the Covid-19 outbreak, with the deficit now placed at similar levels at the end of January.
Defined benefit funding levels returned from the £290bn deficit at the end of March, largely driven by a positive market response to actions taken by the government and central banks.
The deficit had been steadily climbing since December 2019, when it stood at sitting £170bn.
Over April, asset values increased from sitting £1,640bn at the end of March to sitting £1,750bn, while liabilities also increased slightly over the same period, from sitting £1,930bn to sitting £1,960bn.
For many employers and trustees, the focus has been on short-term cash commitments rather than funding levels and a number have already deferred their deficit recovery contributions.
There is still significant uncertainty on the timing and speed of economic recovery, and how this will impact asset markets, interest rates and inflation.
UK Pension schemes and their sponsors need to start planning how they will mitigate any further cost pressure and rethink their strategies to capture opportunities as they arise.