UK - Falling markets have left some investments in defined contribution schemes worth less than the cash contributions made into them, PricewaterhouseCoopers says.
PricewaterhouseCoopers partner and chief actuary Raj Mody said: "With market conditions beyond employers' control undermining defined contribution schemes, it must seem that there is no escape from pension pressures.
"Employers are left between a rock and a hard place. It is no surprise most companies now offer defined contribution schemes, given the unsustainable risk and cost of defined benefit provision."
PwC said a saver - contributing 5% of their salary or around £250 a month into an equity-based strategy over the past decade - would have invested £24,000 into a DC fund, the present value of which would be £21,000, equating to an average annual loss of 3%.
It added that someone who had paid around 10% of their salary for the last 20 years into a similar equity strategy - or around £600 per month in current salary terms - would have invested a total of £94,000 in contributions, the present value of which would be £130,000. This represents an average annual growth rate of less than 4% a year, less than making a cash investment over the period.
However, BlackRock head of UK defined contribution Steve Rumbles urged scheme participants to take a long term view of their investments - and, if possible, take advantage of the lower priced assets available.
He said: "Despite market turbulence now is the time for DC pension investors to steel themselves to maintain and if at all possible increase pension contributions.
"Contributions made now will be buying investments at a substantially lower level than a year ago. In the long term this has the potential to strengthen returns and accelerate recovery of a pension fund hit by market falls. As share prices recover in the future investors stand to benefit from rising capital values."
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