Pensions and Retirement Training Course on Pension Risk Management Frameworks

Module 1: Introduction to Pension Risk Management
Definition and objectives of pension risk management
Types of risks: financial, demographic, operational, legal, and regulatory
Role of risk management in plan sustainability
Case study: Consequences of poor risk management in pension plans
Group discussion: Current challenges in pension risk management

Module 2: Pension Fund Liabilities and Risk Exposure
Overview of DB, DC, and hybrid plan liabilities
Measuring exposure to interest rate, inflation, longevity, and market risks
Asset-liability matching and risk profile analysis
Practical exercise: Identifying risks in a sample pension portfolio
Discussion: Key metrics for assessing risk exposure

Module 3: Risk Identification and Assessment Techniques
Risk mapping and categorization
Quantitative techniques: Value at Risk (VaR), Conditional Tail Expectation (CTE), stress testing
Qualitative techniques: governance review, operational risk assessment
Workshop: Conducting a risk assessment for a hypothetical plan
Case study: Identifying emerging risks in pension funds

Module 4: Governance and Risk Management Frameworks
Establishing governance structures for effective risk oversight
Roles and responsibilities of trustees, sponsors, and risk committees
Policies, procedures, and documentation for risk management
Exercise: Designing a governance framework for pension risk management
Discussion: Best practices in governance and oversight

Module 5: Financial Risk Mitigation Strategies
Asset allocation and diversification
Hedging strategies: derivatives, swaps, and dynamic hedging
Longevity risk transfer: annuities, buyouts, and longevity swaps
Practical exercise: Designing a risk mitigation plan for a sample pension fund
Case study: Successful financial risk management strategies

Module 6: Operational and Regulatory Risk Management
Identifying operational risks: processes, systems, fraud, and human error
Regulatory compliance and reporting requirements
Risk controls and audit frameworks
Workshop: Developing operational risk mitigation strategies
Discussion: Integrating regulatory and operational risk management

Module 7: Monitoring, Reporting, and Early Warning Systems
Key performance indicators and risk metrics for pension funds
Early warning indicators for emerging risks
Designing monitoring dashboards and reporting frameworks
Exercise: Developing a risk monitoring and reporting framework
Case study: Using early warning systems to prevent funding crises

Module 8: Scenario Analysis and Stress Testing
Techniques for scenario analysis: interest rate shocks, inflation spikes, longevity improvements
Evaluating impact on funding levels and solvency
Stress testing for extreme but plausible events
Workshop: Scenario and sensitivity analysis for a sample pension plan
Discussion: Interpreting and acting on stress test results

Module 9: Communication and Stakeholder Engagement
Explaining risks and mitigation strategies to trustees, members, and regulators
Using visual tools for risk communication
Preparing executive summaries and board presentations
Group exercise: Presenting a comprehensive risk framework to stakeholders
Case study: Effective communication in high-risk scenarios

Module 10: Case Studies and Practical Applications
Real-world examples of pension risk management frameworks
Group simulation: Designing and implementing a full risk management framework
Lessons learned and industry best practices
Developing actionable recommendations for ongoing risk oversight
Final discussion, review, and certification