Quarter of work pension schemes lack risk strategy - TPR

A quarter of occupational pension schemes lack a strategy to monitor and mitigate risk, according to The Pensions Regulator.

Despite nearly three quarters of schemes reporting they have a risk process in place, only two thirds of trustee boards are very confident they are properly guarded against specific risks.

Just two fifths of schemes (43%) have confidence in the controls relating to data transfer, though trust in internal management of fraud was higher with two thirds (66%) being very confident in the process.

Larger schemes were much more likely (91%) to have a risk strategy compared to only 59% of smaller schemes, the figures from the Pensions Regulator's fourth annual governance survey suggest.

Default occupational schemes remain popular, however, with nearly two thirds of members invested in such a fund, though this may reflect employee inertia rather than the fund being suitable for the majority of members' investment needs and attitude towards risk, says the regulator.

The regulator today launches a campaign to encouraging good governance and administration and better management of pension scheme risks.

Pensions Regulator chief executive Tony Hobman says: "Good governance underpins secure pensions.

"Scheme members entrust their pension savings into the hands of others to a total estimate of more than £1trn in assets, often for decades of their working lives.

"This campaign is designed to build on progress made in recent years, recognising that trustees perform a critical role in protecting and managing pensions, and are faced with challenges in this difficult economic context."