Scenario Analysis: an essential tool for DB pension schemes

Adopting Integrated Risk Management in your scheme’s decision-making processes can be a difficult task, especially when it comes to allowing for your scheme’s single biggest risk concentration: its covenant.

Below we illustrate how scenario thinking can be used to tackle this problem, and how it can help to shape a holistic risk management strategy. You may even want to ask yourself – how would my scheme and sponsor fare in a ‘hard Brexit’ scenario?

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