Leading business and financial adviser Grant Thornton UK LLP has today launched its own integrated risk management (IRM) software tool, IRM Gateway, to support clients in better understanding their defined benefit (DB) pension scheme funding options and associated risks.
The Pension Regulator’s DB funding regime requires that covenant, investment and funding risks are considered in an integrated way. Grant Thornton recognised that bringing together all three conversations can often be challenging. To tackle this issue, it designed a tool that allows effective, collaborative IRM discussions to take place at an early stage, identifying possible high-level options and strategies which are suitable for more detailed consideration.
IRM Gateway has been developed to build on the core covenant assessment work already undertaken by Grant Thornton’s team and will be used in conjunction with this advice. It brings IRM discussions to life by helping trustees and sponsors to visualise the various financial dynamics of their DB schemes.
Paul Brice, Head of Pensions Advisory, Grant Thornton UK LLP, said:
“We wanted to develop a visual tool for the market that built on our existing covenant work and enabled collaborative conversations between trustees, advisers and sponsors around pension scheme funding choices and associated risk management.
“Visualising the movement of complex scheme funding variables, including the sponsor covenant – whether individually or in combination – is often extremely challenging. IRM Gateway seeks to present information in a user-friendly way so that key risks, such as a reliance on very long-term sponsor longevity, or limited covenant capacity to meet off-plan investment performance, can be identified. Whilst IRM Gateway is not a substitute for detailed actuarial and investment advice, it provides a platform for further in-depth work and discussion of an appropriate IRM plan.”