Stock turmoil leaves staff with 'black hole' in pension funds
Stock market turmoil around the world has left many workers with a "black hole" in their pension pot, according to a business advisory firm.
PricewaterhouseCoopers (PwC) said the eurozone crisis and the markets' uncertainty had left many defined contribution schemes worth no more than the cash contributions made by savers in the last five years.
And defined benefit pension schemes were not necessarily better off, as deficits had deepened dramatically and forced companies to increase cash funding with money which would otherwise finance investment and recovery.
Lindsay Todd, partner and pensions expert at PwC in Belfast, said: "Stock market falls are particularly worrying for people approaching retirement and there is a real danger of triggering their pension pots at the wrong time. In the current situation, it may be appropriate for some people to defer retirement decisions until markets recover.
"And for those with much of their working life ahead, the question is whether now could actually be a good time to make extra contributions."
She said growing deficits were widening for many companies, regardless of the state of their underlying business.
"If markets remain low, those with scheme valuations currently under way or towards the end of year may face difficult negotiations with trustees and potentially demands for higher cash contributions. This is the last thing companies need."