CAPSA has established a new Committee (January 2022) with a mandate to develop a Risk Management Guideline. The Committee is being established to be responsive to the International Monetary Fund’s call to regulators to strengthen their oversight of large pension plans and gain a greater understanding of vulnerabilities in the system.

Good risk management is a key characteristic of a well-run pension plan and an important part of protecting members’ benefits. By having an adequate system for managing risks, plan administrators are better positioned to keep pension plan assets safe and protect the plan from adverse risks.

The Guideline will provide guidance on establishing a pension risk framework that can be adapted to a plan’s unique characteristics. It will cover a way to evaluate, rate and prioritize risks facing the plan based on their magnitude (likelihood of happening against impact) and, to establish mitigation strategies to manage the risks and take advantage of any opportunities that they may present. Risk management is not a one-time exercise but rather an on-going review of potential exposures to new and emerging risks.

CAPSA plans on establishing an Industry Working Group to refine the Guideline in the spring of 2022, prior to publication for public comments.