The total defined benefit (DB) pension shortfall from FTSE 350 companies funds has risen to £127bn, according to Mercer.
The health, retirement and investment consultancy said the deficit increased from £116bn on 27 February 2015 to £127bn on 31 March 2015.
It said this was brought about by a slight fall in the return on investments caused by volatility in the market. The funding level slipped from 84% to 83%.
Data from Mercer's latest Pensions Risk Survey showed liabilities had risen by £18bn to £756bn. While asset values also rose - by £7bn to £629bn - it wasn't enough to make up for the shortfall.
The firm said this was the result of a drop in corporate bond yields and some deterioration in equity markets over the month.
Ali Tayyebi, senior partner at Mercer, said: "Bond yields fell back again in March reversing some of the rise seen in February which provided what seems like a rare period of good news at that time.
"This means deficits have increased to near their record high. The timing will be particularly unwelcome for those companies with accounting periods ending on 31 March."
He said the increasing size of pension liabilities was also highlighted by the fact that when funding levels were at 83% a couple of years ago, the monetary value of the deficit would have been £108bn. Now, however, an 83% funding level equates to a deficit of £127bn, which is almost a 20% increase.
Le Roy van Zyl, principal in Mercer's Financial Strategy Group, said the deterioration in funding was the result of "significant volatility in the market" which was unlikely to diminish any time soon.
"This setback is particularly important for a number of schemes and sponsors where 31 March is a key measurement date. Reducing the volatility through a range of de-risking actions has become a primary objective," he said.