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.