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.