Assessing the health of your DB pension scheme
If Defined Benefit (DB) pension schemes were likened to the human lifespan, then they are entering middle-age. For most, the features of youth– contribution holidays, equity-laden investment strategies, and double-digit interest rates- are gone. However the majority of schemes have not quite reached old-age, so individuals with corporate responsibility for DB schemes now find themselves managing the difficult transition between these two phases – having to be naturally mindful to keep risks and costs low, whilst avoiding any major shocks to the scheme's funding.
Whilst we recognise that no two schemes are alike, based on our experience of guiding companies through this transition, there are five key challenges that repeatedly stand out loud and clear in our discussions with finance professionals. They are:
- Increasing cash contributions
- Operational inefficiency
- Risk exposure
- Accounting problems
- Sub-optimal investment strategy
Sound familiar? We invite you to read our short interactive report "The five pension ailments being felt by FDs today. And how to treat them", and register for a free pensions health check to give you a greater understanding of your scheme's ailments and how you might address them.
At Aon Hewitt we understand the complicated interactions between these key symptoms, and are on hand to offer practical solutions on how to improve and maintain scheme health and avoid any major risks.
Aon Hewitt Limited is authorised and regulated by the Financial Conduct Authority.