How we designed a comprehensive contingency planning framework addressing covenant, funding and investment risks, inspired by LCP Sonar.
Technology & innovation
LCP Sonar, our risk profiling tool, benchmarks your scheme against other pension schemes, covering covenant, funding and investment risks.
Using LCP Sonar you can quickly see how your scheme’s risk profile compares to others and think about the key risks for you – helping you prioritise and manage your risks more effectively.
How we can help
Running a pension scheme can involve hoping for the best but preparing for the worst. Preparation is key. When you hit a bump in the road (and there have been plenty over the years) the amount of preparation you have done will determine how far you get thrown off course.
Each pension scheme has a unique set of circumstances and your approach to risk management should be designed to work best for you. LCP Sonar, our risk profiling tool can help you to:
- Consider what your contingency plans are in the key risk areas
- Develop your own bespoke metrics and/or dashboard to track your risks with actions taken if certain triggers are breached
- Design a de-risking framework or more detailed contingency plans eg in the event of your covenant weakening
- Consider how your scheme stacks up in future possible scenarios
Why is risk management important to pensions schemes?
- For a better understood and controlled journey
- To allow trustees to focus on what is important helping them to make better decisions
- Fewer surprises as schemes mature and get nearer their endgame
- Increasing regulatory scrutiny and pressure to manage risks effectively. This includes the Pension Regulator and the expected IORP II requirements
Did you know?
- 40% of LCP’s clients have some form of legally binding contingency plan in place
- 65% of schemes are currently in a negative net cash flow position (excluding income from invested assets)
- On average, LCP clients hedge 70% of their funded liabilities
LCP Sonar has given us these, along with many other, insights into trends for our clients.
If you would like a demo or to get in touch about how LCP Sonar could help you email the LCP Sonar team here
How we have helped our clients
We helped our client put risk management at the heart of pension trustees’ business
We helped pension scheme trustees to agree a legally binding contingency plan with the scheme sponsor
How we refreshed and reinvigorated our client’s approach to managing their integrated covenant, investment and funding risks, using LCP Sonar.
Our LCP Sonar experts
Our latest thinking
In this blog, Mary Spencer and Fran Bailey discuss pension journey planning and the importance of developing an effective risk management plan that supports a long-term journey.13 November 2018
In this blog, Tony Bacon discusses the DWP's latest regulations on European pensions directive, IORP II.24 October 2018
How we can help
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