Risk Management in Pension Funds

Risk management in pension funds involves identifying, assessing, and mitigating the potential financial risks that could affect the fund's ability to meet future obligations to retirees. This includes monitoring investment performance, interest rate fluctuations, and demographic changes, such as life expectancy. By using strategies like diversification, the fund can spread risk across various assets. Additionally, valuing liabilities accurately ensures the fund remains solvent. Effective risk management helps ensure that pension funds remain stable and are able to provide consistent financial support to retirees when needed.