Is your pension plan built to last?
Morneau Shepell has developed the Pension Risk Assessment to identify areas of risk in a plan, and a pension diagnostic process to model how future volatility will affect pension plans, particularly defined benefit (DB) plans.
What is the Pension Risk Assessment and how does it work?
- The Pension Risk Assessment brings awareness of pension risk, whether in a DB or DC plan, and provides insight into potential areas of vulnerability such as governance, plan design, financial and administration.
- Respondents who complete the assessment will receive a real-time report that includes their ranking relative to peers, best practices, suggested steps to reduce risk and questions to consider.
- The Pension Risk Assessment takes approximately 10 minutes to complete.
For a deeper understanding on how future volatility will affect your pension plans, particularly defined benefit (DB) plans, ask us about our diagnostic process. Our diagnostic process will:
- Help you appreciate the risk exposure under your current pension program
- Analyze the potential success of a variety of risk mitigation strategies, including variation in member benefits through contingencies based on the plan’s financial status
- Model the range of results incorporating going-concern funding, solvency funding, accounting expense, etc., using any desired investment strategy
- Reflect unique items, including contingent benefit elements (e.g., indexing based on plan funded level) and specialized asset classes (e.g., letters of credit for solvency)
Our diagnostic process evaluates how your plan’s current funded level – where you are right now based on solvency measures and accounting expense ̶ will influence where your plan can be in five, ten and twenty years. We illustrate a range of possible outcomes based on plan-specific parameters. The diagnostic process can also analyze the impact of making prospective benefit changes, such as introducing contingent elements (incorporating those elements that are permitted in the applicable jurisdiction). The outcome of this process is to understand the actions needed to be undertaken to improve the resilience and sustainability of your pension plan.