GLOBAL IRIS RISK REPORTING

Situation

The corporate sponsor of a large multinational, global pension scheme (c. £21bn) was conscious of the impact of pensions risk on the corporate balance sheet and on the perception of key market participants, in particular ratings agencies. As part of its assessment of its ability to take on pension exposure, the sponsor also considered the size of the pension risk versus the company's free cash flow (the former of which was significant).

 

Problem

This global plan contains several smaller pension schemes around the world. Each pension scheme had its own local reporting from separate service providers, which meant there was no consistent and comprehensive global reporting process; consequently, the sponsor had no way to compare or assess aggregate pensions risk.

 

Implication

The sponsor found it difficult to strategically coordinate or implement a strategy across the different pension plans on a global level, and assess the ability to take pensions risk.

 

Need

A single report across all the pension schemes that provided comprehensive, consistent global risk reporting was neccessary. A single provider would need to provide this, and aggregate data from multiple service providers. It was necessary to run risk analysis for large, complex portfolios and clearly present this analysis to the sponsor.

 

Result

Redington was mandated to provide quarterly iRIS reports to the corporate sponsor. We worked with multiple service providers to ensure both asset and liability data arrived in a timely manner and in a usable and correct format. In 2013, the corporate sponsor mandated Redington to run a single, global report covering four pension schemes across three countries. As a result of the success of this project, other foreign pension schemes have asked Redington to provide them the same service.

 

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