Pension schemes are beginning to adopt broader risk management practices to help achieve strategic goals during the volatile times, according to Aon Consulting.
The risk management and employee benefits consultant is employing enterprise risk management (ERM) within a growing number of pension schemes. Rather than focusing solely on the financial risks of a pension scheme, this takes into account other risks that might affect a scheme’s ability to pay member benefits.
These risks could include legal interpretation, technology failures and the introduction of new legislation, regulation or accounting standards.
Marcus Hurd, head of corporate solutions at Aon Consulting, added: “ERM has a key role to play in the future of pension scheme management. A holistic approach to risk management is critical to the performance and operation of the pension scheme.”