Risk Management

Use of risk management principles in decision making is not a new concept. However, the landscape is changing – best practice has pushed on, and IORP II sets new standards. This can be an opportunity to streamline scheme management and improve outcomes by better understanding and controlling your risks.

Get it right and your well-run scheme will take up less management time cost less to deliver. Get it wrong and the time, cost and reputation risk can be significant. So, how do you make sure you are doing enough without going too far? And would you feel comfortable explaining what you do to the Pensions Authority?

Appropriate and proportional

Good governance and risk management should not mean more bureaucracy.

A robust yet proportionate approach allows you to make the best use of limited resources. The basic need is to understand the risks facing the scheme, check they are not outsized relative to the support available and put in place appropriate monitoring to trigger actions when the risks move outside a defined range, acting on upside as well as downside.

So, Trustees need a high-level assessment of the reliance on covenant, together with a clear understanding of the risks posed by funding and investment strategy, and the interactions between them. This integrated thinking will quickly identify the key issues and allow you to manage the majority of the risks for the least amount of effort.

Kick off your Risk Management discussions with Governance Lens

To help you address this we have created a cost-effective, structured service for the Irish market, supported by a unique tool, Governance Lens.

As well as comprehensive coverage of the main risk areas, Governance Lens provides a broader perspective on how a scheme is run, covering wider governance concerns as well as operational and communication effectiveness.

Governance Lens provides you with an easy at-a-glance view of your risk and governance profile, with a clear comparison to your own preferred final state, and as part of the service our reporting will cover all of the gaps that have been identified for action, helping you to prioritise and set a development agenda that suits your scheme.

Our wider risk management services

Our overall risk management service offering is a comprehensive one, covering all areas that may be needed by pension scheme trustees and plan sponsors. These include, for example:

• Risk Management reviews, using “Governance Lens” and “DC Governance Lens”
• Risk frameworks: development, implementation and related monitoring services
• Outsourced Risk Management Key Function Holder service
• Support services for internally-appointed Key Function Holders
•  “Own Risk Assessment” facilitation and supporting services
• Covenant assessment support services

Key tools include

• Asset Liability Suite
• Funding Projector
• Governance Lens
• DC Governance Lens