Western Europe is second to North America, for having the highest average ratio of pensions underfunding to revenues, according to research by MSCI.

Its Global Pension Study analysed the ratio of pension obligations and the resources set aside by global corporates to fund them. The European ratio grew by 33 basis points from the 2015 average, and 124 basis points compared to 2011 figures.

The current ratio in Western Europe is 6.11 per cent, compared to 5.91 per cent in 2015 and 4.87 per cent in 2011. A closer look at the data shows substantial variation by country within region.

Among European countries, Switzerland (12.62%), Germany 8.91%), Austria (8.74%), and Ireland (8.31%) stand out as having the worst underfunded position relative to revenues. However, for Israel (1.42%), Portugal (1.92%), Denmark (2.05%) and Greece (2.18%) the ratio is much lower.

In addition, MSCI has examined how the ratio varies by sector, and found that globally, utilities and telecommunications sectors exhibit relatively higher underfunding ratios. The healthcare sector in Europe also has a notably high ratio. Non-cyclical and cyclical consumer goods and services, on the other hand, have the healthiest ratios overall.

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