Employees and retirees could expect drastic reductions in their pensions, if their companies can’t survive long enough to fully fund defined-benefit plans.

Two leading actuarial firms estimated yesterday that investment losses and falling interest rates combined to slash solvency funding levels, which measure a pension’s health, by 28 per cent last year. The global credit crisis has sapped investor confidence and erased trillions of dollars of wealth, impairing pension plans of all stripes.