Risk Management in Pension Schemes

Course Overview

This course provides a comprehensive understanding of risk management principles as applied within the context of pension schemes. Participants will explore how to identify, analyze, and respond to potential risks that could affect scheme objectives, financial sustainability, or member outcomes.
It highlights the importance of establishing a robust risk management framework, defining risk appetite and thresholds, and ensuring that boards and trustees can make informed decisions under uncertainty.
Through practical models, case studies, and simulations, the course equips learners with tools to evaluate probability, impact, and proximity of risks — from regulatory and investment risks to governance and operational challenges — and to integrate effective mitigation strategies into scheme management.

Key Topics

• Understanding Risk and Risk Management – Definitions, core concepts, and relevance to pension fund operations.

• Risk Identification and Evaluation – Processes and tools for identifying risks, assessing likelihood, impact, and timing.

• Risk Appetite and Thresholds – How boards determine acceptable levels of risk and document risk tolerance in governance frameworks.

• The Risk Management Process – Planning, identifying, analyzing (qualitative and quantitative), responding, and monitoring risks.

• Risk Analysis Techniques – Qualitative and quantitative approaches including probability-impact matrices, sensitivity analysis, decision tree analysis, and Monte Carlo simulations.

• Risk Response Strategies – Managing threats (avoidance, mitigation, transference, acceptance) and opportunities (exploit, enhance, share).

• Monitoring and Reporting – Setting up systems for ongoing risk tracking, reporting, and evaluation.

• Stakeholder Management in Risk Governance – Engaging and communicating with key stakeholders based on influence and interest.

• Practical Application – Using risk simulation models, heatmaps, and Excel-based scoring tools to visualize and manage pension risks effectively.