Risk Management Survey – win an iWatch!

Crowe, in association with Pensions Age is undertaking its third survey into the risk management of Trust based pension schemes. Completion of this survey each year identifies trends in risk management and there are some new questions to assess readiness for new trustee responsibilities relating to scheme governance.

If you are actively involved in managing occupational Trust based pension arrangements, we would appreciate it if you could complete this short survey. It will take no longer than 10 minutes to complete and the survey will close on 2 August 2019. We will not publish any names of participants or their organisations in our report.


Pensions Age will also put all participants in a draw for a free iWatch as a thank you for taking part.


In January 2019, the Pensions Act 2004 was amended to require trustees to ‘operate an effective system of governance including internal controls’. The Pensions Regulator is currently preparing a Code of Practice which will set out how it expects trustees to do this, which will cover:

  • sound and prudent management of activities
  • organisational structure and segregation of responsibilities
  • system for ensuring transmission of information
  • internal control system
  • continuity and regularity in the performance of its activities, including the development of contingency plans
  • environmental, social and governance factors related to investment assets in investment decisions.

  • Questions
    1. What type of occupational Trust-based pension arrangement are you responsible for?
    Trust based DB
    Trust based DC
    Hybrid (i.e. both DB and DC)
    2. How large is the pension fund you are responsible for?
    Less than £100m assets
    £100m– £1,000 assets
    more than £1,000m assets
    3. How many members are in your pension arrangement?
    Less than 1,000 members
    1,000 – 9,999 members
    more than 10,000 members
    4. The regulator is asking for a formal assessment of the system of governance. Do you already do this, and if so, how often?
    Yes, quarterly
    Yes, annually
    Yes, every 3 years
    5. Does your assessment of your pension scheme’s system of governance currently cover the following:
    Yes No Don't know
    a) whether there is an adequate and transparent organisational structure with a clear allocation and appropriate segregation of responsibilities
    b) whether there is an effective system for ensuring transmission of information
    c) whether it includes an effective internal control system
    d) whether it ensures continuity and regularity in the performance of the scheme’s activities, including the development of contingency plans
    e) whether it includes consideration of environmental, social and governance factors related to investment assets in investment decisions
    f) whether it is subject to regular internal review
    6. Where do you document the assessment of your system of governance? (pick all that are applicable)
    Business plan
    Risk Register
    Statement of Investment Principles
    Trustee minutes
    Internal audit reports
    Third party agreements
    Sub-committee minutes
    Governance policy documents
    7. Who performs the assessment of your system of governance? (pick all that are applicable)
    Pensions Manager
    Internal audit
    External auditor
    Actuarial advisor
    Pensions advisor
    Secretary to Trustees

    A risk management function

    Identify and manage risk in the pension scheme including asset-liability management, liquidity, employer covenant, investment and administration and in addition the ability to consider new and emerging risks.

    An internal audit function

    Evaluate the pension scheme’s internal control systems and other areas of scheme governance including any outsourced activities.

    8. Do you have specific individuals or organisations covering?
    Yes No
    a) The risk-management function
    b) The function which internally evaluates adequacy and effectiveness of the system and governance
    9. Do the same specific individuals or organisations cover both these functions? (Y/N)
    10. Do you have a remuneration policy for:
    Yes No
    a) Trustees?
    b) Pensions manager?
    c) Administrators?
    d) Actuarial function?
    e) Other professional advisors?
    11. How often is the remuneration policy reviewed:
    Every year?
    Every three years?
    Ad hoc?

    Risk appetite/ tolerance

    Risk appetite is the amount and type of risk that the pension scheme is willing to take in order to meet its strategic objectives.
    Risk tolerance is the amount of risk that a pension scheme can feasibly cope with.

    12. Has your Trustee body discussed topics such as the Trustees’ appetite/ tolerance for risk?
    No discussions have taken place by the Trustees on this subject
    No further action taken following initial discussions
    Trustees have developed a generic statement describing the pension scheme’s risk appetite/ tolerance
    Trustees have identified differing levels of risk appetite/ tolerance on a risk by risk basis
    Trustees have used risk appetite/ tolerance concepts to help prioritise mitigate specific risks
    13. Does your pension scheme have an Internal Auditor function? If yes, who fulfils this role?
    Not sure/ have not considered
    Have considered and decided not necessary
    Have considered necessary but no arrangement currently in place
    Role undertaken by sponsor’s internal audit function
    Role undertaken by independent audit firm or other third party
    14. In terms of the potential vulnerability of your pension scheme to cybercrime:
    Yes No
    a) Have the Trustees identified the key operations, IT systems and information flows vulnerable to cybercrime?
    b) Does the Scheme meet the Cyber Essentials plus standard?
    c) Have the Trustees assessed the vulnerability of their Third Party suppliers to cybercrime?
    d) Is there a plan in place to respond to a cybercrime breach?
    e) Have the Trustees received cybercrime scenario-based training?
    Risks to schemes
    15. In your view, what are the biggest risks facing Trust based DB pension arrangements in the UK? Please rank your top five risks (1 being most important):
    Fraud/ scams
    IT/ Cyber risk
    Trustee capabilities/ governance
    Meeting regulatory /compliance requirements
    Funding volatility
    Inappropriate Investment strategy
    Investment under-performance
    Employer Covenant
    Quality of risk management
    Sponsor/ Trustee relationship
    Poor communications
    Inappropriate decision making by members
    Data protection
    Inadequate Controls
    16. In your view, what are the biggest risks facing Trust based DC pension arrangements in the UK? Please rank your top five risks (1 being most important):
    Fraud/ scams
    Trustee capabilities/governance
    Meeting regulatory/ compliance requirements
    Member administration & record - keeping
    Investment performance monitoring
    Data protection
    Receiving contributions on time
    Delivering ’Value for Members’
    Poor communications
    Design of default fund
    Inadequate Controls
    Inappropriate decision making by members at retirement
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