New York, New York (PressExposure) December 08, 2009 -- "Mann International", the Asian-based asset manager, has warned its UK clients to exercise greater vigilance regards their pension provisions after it emerged that more British companies are restricting employee participation in final salary pensions schemes and, instead, preferring to offer defined contribution schemes.
Final salary schemes entitle the retiree to a pension based on their final salary but are proving too expensive for many companies hit by the deep recession.
"Mann International" sources say that defined contribution schemes, which rely heavily on the performance of the financial markets, are prone to the vagaries of rising and falling prices of equities this can mean that an employee retiring at the wrong time could find their pension fund depleted in value and, consequently, unable to provide the expected benefits.
In extreme cases, retirees could have to remain in work while the fund recoups its losses.
"Mann International" warned its clients to pay particular attention to the funds in which their pension contributions were being invested adding that sensible diversification was the key to avoiding catastrophic losses.
The ONS (Office for National Statistics) showed that 100,000 private sector final salary schemes closed in 2008 and "Mann International" said that many more would close before the economic fortunes of the UK returned to any semblance of normality.