U.K. corporate plan sponsors and trustees are too parochial in the way they manage risks at their defined benefit pension plans, according to a new index that quantifies how well companies managed pension risks.
MetLife Assurance on Monday introduced the U.K. Pension Risk Behavior index, which assesses how company officials and pension trustees view and handle risks.
MetLife found that trustees focus too much on investment risk, while corporate officials focus too much on liability and business-related risks.
“A truly holistic view of risk management on the part of both trustees and scheme sponsors requires both sides to fully assess and prioritize all risks, even those for which they are not primarily responsible,” Dan DeKeizer, CEO of MetLife Assurance, said in a news release. “Our inaugural study should encourage scheme sponsors and trustees to communicate regularly about a full range of issues that affect their schemes.”
The index score was 78 out of 100; scoring assesses the importance respondents ascribed to each of 18 risks, their perceived success at handling each risk and the consistency between the two.
The index is based on a survey of 47 U.K. plan sponsors and 42 trustees from December to February.