Global governance

The main themes from the 2019 Global Pension Risk Survey are design, operations and long-term financing.

Please click on one of the hexagons to the right to find out more about each area and the associated statistics.

DB to DC

DC is commonly required where legal

  • But 11% remain committed to DB

DC is common for new employees

  • In Ireland 2/3 retain DB for existing members
  • But in Asia-Pacific 40% remain open to all

In some countries DC retains guarantees:

  • In Switzerland pure DC only for higher earners
  • In Germany first ever pure DC recently established

Major reform is pending in the Netherlands

  • Requires age-independent contributions

Monitoring regulatory change

Regulatory change is monitored more than financing risk:

  • Monitored by 84% of global retirement committees
  • Material concern for 59% of global survey respondents

Supporting employee financial wellbeing

Financial wellbeing of employees is a material concern for 65%

Increasing focus on operational risks

Operational risk governance is important in the UK, Ireland, Germany and Asia-Pacific.

  • EU governance requirements are triggering interest in multi-employer plans

Managing cyber risks

Cyber risks are higher on local than global governance agendas:

  • Only 14% of global respondents indicated cyber concerns
  • 3 in 4 UK respondents had cyber training or intend to have soon
  • Cyber risk assessment and insurance is common in Germany
  • Swiss plans intend to retain cyber expertise and simulate risks
  • All Asia-Pacific respondents intend to review cyber risks and mitigations
  • US respondents indicated the least preparation or intentions

Asset de-risking

De-risking is the main theme of long-term strategies:

  • 90% have long-term targets in their largest countries
  • 75% have long-term growth-asset targets
  • But nearly 50% have no timeframe nor triggers

Settlement for insurers

Settlement with an insurer is the global aim for 30%

  • Over 40% have already settled some liabilities
  • Even more targeting settlement in the US & UK
  • Lack of awareness of insurer interest elsewhere
  • Record volumes of settlements globally in 2019
  • Lack of data preparation is noted in some countries

Flexible options for members

Liabilities also increasingly settled with members:

  • Lump sum options in many countries, most options in the UK
  • In the US and Germany, statutory terms create periodic windows

Diversifying to alternative investments

Global investment guidelines exist for more than 2 in 3 companies:

  • But guidelines lag the local diversification away from equities, less than 1 in 3 have guidelines for property, illiquids or hedging
  • Lack of internal expertise in these areas is driving delegation of 
strategy execution
  • The Netherlands seems to buck the diversification and hedging trends
  • ESG gaining strong focus in most countries, but only 15% have 
 global guidelines
  • Within bond portfolios, low interest rates are driving focus from government bonds
  • In Germany and Asia-Pacific there are growing trends towards 
holding assets

Delegation for expertise

Hedging interest rate risks

Liability management

Global Pension Risk Survey 2019

The Global Pension Risk Survey is Aon’s biennial survey of pension plan sponsors, trustees/fiduciaries and other pensions professionals. It has been running for a decade. Click below to view your country's report.

The survey explores the thoughts and risk management philosophy of those involved in DB pension decision-making, and the ways they plan to manage their DB assets and liabilities over the coming year.