It will take more than 20 years to recover pension fund deficits if contribution rates remain unchanged, Towers Perrin warns.
The global consulting firm said volatile bond yields and weak equity markets have severely affected pension schemes and its calculations reveal it could take two decades to get back on track.
It said the combined pension fund deficits on the balance sheets of the UK's top 100 companies are now valued at £45bn, which marks a slight improvement since the end of March.
However, the firm said that figure did not tell the whole story because it was based on corporate bond yields which remain high.
Towers Perrin principal John-Paul Augeri said for pension trustees who are responsible for the funding of DB schemes the current deficit is more likely to be approaching £200bn as they take a more conservative view.
He said this raises a serious concern for the future of pension funding in the UK.
"In the UK we now face decades of paying back government debt. To compound the problem, more and more pension plans are facing a similarly long and rocky road to recovery.
"In order to survive, employers need to understand what they can afford, appreciate the magnitude of the risks they face, and be ready to take advantage of any opportunities to reduce their debt and risk exposure as and when they arise," he said.IFAonline
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From 6 April 2019