Industry News

On December 4, 2020, the Society of Actuaries (SOA) published their Retirement Section report, Defined Benefit Risk: Phase 1 Literature Search Report. The three-phase research project is intended to address the challenges in communicating defined benefit pension risk to stakeholders. The Phase 1 literature search identified articles on pension risk that were published in peer reviewed journals over the last 15 years in addition to submissions on pension risk management of the Social Sciences Research Network (SSRN).

The Phase 1 report covers literature related to: 1) risk management; 2) risk measurement; and 3) risk mitigation. The report states, “There are no “one-size-fits-all” examples of risk disclosures to assist the service provider in communicating pension risks to their clients. However, the literature search produced numerous examples that will help the advisor tailor the risk message, thereby helping the sponsor effectively manage its pension risk. The practitioner needs to be well versed in all aspects of risk management to effectively help his client manage its risk exposures.”

Phase 2 will include interviews with individuals representing various aspects of plan governance and operations including: plan sponsors, finance professionals, consultants and providers. Finally, Phase 3 will review and integrate the findings from Phases 1 and 2, and recommend other areas for additional study.

Jim Anderson, Senior Consultant at GRS, currently serves on the SOA’s Project Oversight Group for this effort.

The report is available here.