pension risk management

Pension risk management involves identifying and handling uncertainties that could affect a pension fund’s ability to meet its financial commitments to retirees. This includes managing investment risks, inflation, longevity (people living longer than expected), and funding level fluctuations. The goal is to ensure the pension fund can reliably pay promised benefits, balancing investment strategies, funding contributions, and risk mitigation practices. Effective risk management helps protect the fund from sudden market changes or unexpected events, ensuring long-term financial stability for retirees and the organization sponsoring the pension plan.