Just 30% of defined benefit (DB) pension funds have developed an integrated approach to risk management, according to a survey by Xafinity.
The firm polled more than 100 respondents from pension schemes and employers on 26 January to test to what extent the concept of integrating the three key risks of covenant, investment and funding, has been adopted.
Of the remainder 70% that had not done so, just over a quarter said it was currently underway, 27% said they had not yet developed a strategy, and 17% said they were not sure.
It follows The Pension Regulator's (TPR) guidance on integrated risk management published last December to help trustees and employers agree on a sustainable plan for the delivery of promised member benefits. At the time it was hoped this guidance would serve as a wake-call to trustees that had not yet taken action.
Despite many schemes yet to develop a fully integrated approach, the survey's results revealed they were embracing the concept with 75% respondents saying they saw value in it. Around a fifth said there may possibly be value while just 5% were undecided.
Xafinity head of proposition development Paul Darlow said: "It is encouraging that pension schemes and employers see the value in answering the questions posed by integrated risk management. This is perhaps not surprising given current volatility in financial markets and pension scheme finances, but it suggests to me that the Regulator's latest guidance on this subject has got the balance right.
"And while our poll showed that many schemes had not yet developed a fully integrated approach to managing risk, most already have made some progress and are continuing to do so."
Almost two-thirds of respondents said they used an external specialist to assess employer covenant, with 36% using one to undertake detailed work, and a smaller proportion (27%) to undertake high level work. Of the remainder that did not use an external specialist, a quarter said the company provided information to the trustees to help form a view on the covenant, and just 9% said the trustees formed their own view.
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