Pension plans ignore ‘less well understood’ risks

The Metlife report warned that the standard approach of pension plan sponsors to focus on some risks and to ignore others could lead to serious repercussions, “including unnecessary volatility in earnings and/or cash flow with the potential to adversely affect the ability of the plans to provide retirement security to plan participants.”

Pension plan sponsors in the US tend to view and manage risks individually rather than holistically, according to a report on the risks faced by pension plans in the market released recently by life and pensions insurer, MetLife.