Funding level improvements – how do we keep up the momentum?

Most pension schemes enjoyed improvements in their funding levels over 2017, but the recent equity market correction served as a helpful reminder of the risks that schemes remain exposed to. These risks may impact the scheme’s assets, liabilities, or its sponsoring covenant – risk factors that impact more than one of these areas collectively are of particular importance, and should be addressed using Integrated Risk Management techniques.

Below, we reflect on the recent good times and highlight how interest rate increases, which would benefit many schemes, could at the same time harm some sponsors. We also explore some of the tools available to help manage such downside risks before they occur, ensuring that schemes can keep up the momentum.

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