Risk of Ruin allows trustees and sponsors of defined benefit pension schemes to:

  • Understand how likely it is that their scheme will be able to pay full benefits;
  • Look at the impact of different funding, investment and management strategies in enhancing the security of member benefits; and
  • Consider how changes in the covenant will impact on member benefit security.

The Risk of Ruin report

The Risk of Ruin report

Our new research report allows trustees and employers of defined benefit pension schemes to assess the real risks associated with their scheme.

Success for a pension scheme is paying members’ benefits in full. Failure is being forced to reduce benefits. We define the Risk of Ruin as the likelihood of members’ benefits not being paid in full. The Risk of Ruin can then be modelled to test the impact of changes in investment strategy, funding approaches and covenant all at once. Our research report looks at many of the levers typically used by pension scheme trustees to manage risk and tests their effectiveness through the lens of Risk of Ruin. The findings are fascinating and, in many cases, challenge the conventional wisdom.

Risk of Ruin Report
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Jonathan Punter interviews the Risk of Ruin team

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Listen to the podcast to hear our experts discuss Risk of Ruin.

The research has been led by Richard Jones FIA with support from Matthew Claisse FIA, Alex Bates and John Yarrow. Click on the authors’ names to be taken to their CV.

Risk of Ruin modeller

Interested in the Risk of Ruin modeller for your own scheme?

Our simplified modeller allows you to calculate the Risk of Ruin in a variety of different situations and test the impact of changing the covenant as well as the funding position and investment strategy.