Pension Scheme Risk Management Registers Move Centre Stage
Is Your Pension Scheme Risk Register Delivering Under Pressure?
Advisers may be keen to demonstrate how their technology can bring pension plan risk management and risk registers into the 21st Century. However, they persist being the forlorn document of scheme governance, sitting on their own in meeting papers, given a cursory glance from time to time, overlooked in favour of more exciting investment updates.
In the current environment, pension risk management has moved to the top of the agenda,, a good risk register is now taking centre stage as the single most important governance document. A well-written risk register with a clearly defined pension risk management framework inspires confidence in members, sponsors and regulators that the scheme is well run even when under extreme pressure.
Change from Abstract to Action-Orientated Risk Management
Whilst ‘risk’ is a rather abstract idea, people are much more comfortable with ‘actions’, which are concrete and easy to understand. The current situation is showing that relating risk to mitigations and actions, is crucial when building pension risk management strategies.
Scheme business plans and annual calendars are extremely useful and practical working documents. They are action-driven, which appeals to us as people, yet it is often overlooked that these ‘actions’ are, of course, the very same items listed as controls’ on the risk register.
Putting the annual calendar and risk register in the same pension risk management document, so the two can be seen side by side brings the concept of active risk mitigation to life and delivers clarity.
New actions, agreed for the annual calendar automatically go onto the risk register as a new control. As events develop and the risk register is updated, new controls are agreed, and they are added to the calendar.
What About Risk Management Dashboards?
With all the clever technology solutions aiding pension scheme risk management, it is easy to get carried away and try to incorporate too many metrics. However, prioritising risks is as important as being able to identify them.
Taking time to pick the main risks for your pension scheme, and then putting the dashboard on the front of the same calendar/risk register document or online system, helps Trustees maintain their strategic objective.
This practical and systematic approach to pension scheme risk management generates a single, strong governance document summarising all of the key controls and management practices. It is flexible enough to incorporate even rapid changes and gives the Trustee Board a key area of focus.
is the time for risk management registers to assume centre stage.
If you would like to discuss how Pi Consulting could help in the management of your pension scheme please contact firstname.lastname@example.org or your usual Pi contact.
Pi Partnership provides specialist independent consulting to employers, occupational pension schemes and Boards of trustees. We are one of the leading UK providers of independent scheme secretaries and specialist governance support. We also provide professional trustee services to a wide range of pension schemes. Over the last 20 years, we’ve worked with clients ranging from FTSE100 companies to small charitable organisations. For more information about the services, we can offer your business contact us today.