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Deloitte comments on the Pensions Regulator’s integrated risk management (IRM) guidance

8 December 2015

Marian Elliott, Deloitte’s London head of trustee advisory services, said: “The IRM guidance issued today should be viewed as an opportunity rather than a threat. It should help deliver better outcomes for scheme members, trustees and sponsors.

“Effective pension scheme management depends on understanding the key risks facing the scheme, but also how they interrelate. That is easy to say but can be difficult for trustees to achieve, unless they are provided with advice from covenant, investment and actuarial advisors in a co-ordinated way. Advisors will have to up their game, forming multi-disciplinary teams to provide the risk management metrics that trustees will need to inform their decision making process.

“Trustees must understand how their advisory team will work together to provide the necessary elements required to set up and manage the IRM framework. Failure to do so could result in schemes taking inappropriate or unnecessary levels of risk; at best there is a real risk of inconsistencies, duplication of work or a significant increase in running costs.

“Turning a risk management framework into better outcomes depends not only on analysis but, perhaps more importantly, on action. Once the scheme’s objectives and key risks are understood, it is crucial that the employer and trustees put clear funding, contingency and risk mitigation plans in place. It will not always be possible to remove or manage all the risks facing the scheme. The point is to reduce the likelihood of being caught unaware and to have a process in place which enables trustees to easily monitor, understand and react to changes in the funding position and strength of the employer covenant over time.”

End

Notes to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Gillian Bishop
Deloitte LLP
+44 020 7303 0776
gibishop@deloitte.co.uk

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