It said the return on emerging market equities was -3.4% in January, to which the firm alsp blames the virus for.As interest rates dropped considerably, the 30-year swap rate – Dutch schemes’ main standard for discounting liabilities – fell by 29bps to 0.34%, both firms said.As a consequence, pension funds’ liabilities rose by approximately 5% under the official discount rate, which is boosted by the application of an ultimate forward rate (UFR), according to Mercer.Were the pure market rate to be used, liabilities had risen even higher, by 6%, it added.Aon warned that Dutch pension funds remain vulnerable because of the sector’s widely shared expectation of lower returns in the coming years.It said that investment results ranging from 3-4%, including volatility, threatens to limit pension funds’ recovery potential.Although social affairs’ minister Wouter Koolmees has granted a temporary reprieve last November from the minimum funding requirements, the minimum required coverage ratio will be back from 90% to the official level of 104.3% at year-end.‘Stay calm’Aaron Costello, regional head for Asia, at Cambridge Associates, said: “Investors should stay calm.” While the Wuhan coronavirus is still spreading, the virus remains less deadly and more contained than the SARS outbreak of 2002–03.“Looking at other epidemics, history suggests that after an initial sharp hit, economies and markets typically recover quickly,” he added.He said the economic and human impact of the Wuhan coronavirus outbreak is still increasing, and markets may decline further in the coming weeks.However, investors should not overreact. “Indeed, further downside in Asian and Chinese equities may provide a compelling buying opportunity once the fear subsides,” he said.StyleAnalytics, a factor analysis expert company, said the biggest economic risk at this point is fear of a Chinese market collapse and a drop in Chinese productivity/supply chain to the rest of the world.It agrees that investors “shouldn’t worry much about factor tilts if the virus remains contained to China”.But it suggests that if the contagion results in a fear-scenario, investors might want to tilt towards low-volatility and away from small-cap equity.It said: ”Since the biggest impact of this virus will almost certainly be to the Chinese economy, the protection that low-vol and yield provided during the last  Chinese equity crisis suggests a defensive strategy for factor investors as the world watches this latest crises unfold.” The negative economic impact of the coronavirus outbreak in China last month has slightly affected the funding positions of Dutch pension funds, undoing the improvement achieved in December, Aon said.Aon, as well as Mercer, said Dutch schemes’ coverage ratio dropped to 101% on average in January. This is a decrease of two percentage points according to Aon, and three percentage points according to Mercer. Both consultants use slightly different calculation methods.Aon said the coverage ratio had increased in December to 103%. According to both firms, the average policy funding ratio at the end of January for Dutch pension funds was 102%.Due to global fears of the coronavirus, equity returns declined and there was a flight to safe investments, which lowered interest rates, Aon explained.