Pension funds are now subject to stricter regulation, while their performance is subject to the critical gaze of members and sponsors. The credit crunch, low interest rates and increased life expectancy have put coverage ratios under pressure. Recovery plans, involving drastic options such as reduced pension payments, have been implemented. Smaller funds are finding it harder to justify their existence owing to the increase in rules and regulations, which has also led to a rise in costs. Given these dynamics, it is vital that the management responds to the changing environment appropriately and in good time.
Key concerns for pension funds
The specialists at BDO are familiar with the regulations and issues with which pension funds have to contend. In our view, pension funds have a long-term focus by definition. This means that you also need to focus on controlling long-term risks. In this context, we have identified the following key concerns:
- Opportunities for making structural improvements with regard to investment policy;
- Corporate governance and remuneration policy;
- Countervailing power against third parties (e.g. when outsourcing);
- Cost control;
- Management of risks (including inflation risk).
Pension Fund Sector Group provides insight
The Pension Fund Sector Group can assist you with the aspects of management referred to above. We can provide insight into the risks and costs you face, and advice and support to help you control them.