Given the coronavirus epidemic, what can pension scheme executives and trustees do to contain the impact on their stakeholders?

18 March 2020 Posted by: Bart Heenk Posted In: Crisis management

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The recent coronavirus epidemic has led to travel restrictions, some companies instructing their staff to work from home and to severe market dislocations. What can pension scheme executives and trustees do to contain the impact on their stakeholders?

Avida International has put together a brief list of thoughts that you may find helpful in dealing with this crisis.  

Questions to ask your internal organisation and external providers:

  1. Are we following official medical guidelines?
  2. Have we set up a crisis team and is this functional? Is the chain of command clear to everyone?
  3. Should we declare a crisis and invoke our contingency plans?
  4. Are we prepared for a total lockdown of our offices? Do our people have access to IT equipment to work remotely? Do we have IT support when working from home?
  5. Do we have the IT systems to conduct Trustee meetings by conference call?
  6. Does the current situation lead to additional reporting requirements / opportunities to our stakeholders (Trustee Board, IC, sponsor, regulator, members)?
  7. Will we continue to be able to make regular pension payments if our pension administration provider is affected? What are the admin contingency plans?
  8. How is our risk appetite affected by market dislocations?
  9. How is our risk appetite affected by our funding ratio?
  10. Do we stick to our rebalancing policy?
  11. Do we stick to our de- and re-risking triggers?
  12. Have macro-economic assumptions that are the basis of our investment strategy changed?
  13. Are we still fully collateralised on our LDI / derivatives positions and do we have sufficient liquidity to deal with collateral calls, cash calls, margin calls etc?
  14. Should we be worried about our bank counterparties for swaps/ repos etc?
  15. What are the contingency plans of our investment consultant / fiduciary manager / LDI manager? Will we continue to have access to them?
  16. Can we get information on our exposure to certain industries, companies, countries etc?
  17. Are there any legal issues we need to worry about (e.g. pandemic being a force majeure in any of our contracts)?

We really hope you find this list useful - if you would like to speak to us please ring your local Avida office - details below- or email info@avida-int.com

London +44 203 637 5759; Amsterdam +31 20 737 1047; Munich +49 89 205 008 5020

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