More than nine out of 10 employers say their company pension scheme remains a risk to corporate finances according to research from LawDeb.
The survey shows concerns about pension scheme risks weigh heavily, despite the fact that 86 per cent of DB schemes currently have a surplus.
The findings show that 7 per cent of respondents believe their pension scheme presents a significant risk, while 57 per cent categorise it as a moderate risk. A further 29 per cent agree that their scheme brings limited risk, leaving only 6 per cent of decision-makers who see no risk at all from their pension scheme.
LawDeb Pensions managing diretor Sankar Mahalingham, says: “The research shines a light on the increasing pressures businesses face in managing pension schemes, alongside broader financial and operational risks. It also exposes an interesting juxtaposition — more than four-fifths of DB schemes are in surplus, yet business leaders are still incredibly conscious of risk.
“Addressing these risks proactively is crucial for maintaining financial stability and business resilience, while ensuring the scheme continues to provide benefits to its members.”
The survey also highlighted other areas seen as posing potential risks to a company’s balance sheet.
Around 92 per cent of finance decision-makers cited cyber threats as a key business risk. This is just below those concerned about pensions risks – although a higher percentage (18 per cent) classified this as a ‘severe’ risk.
This is followed by financial risks and people’s risks. ESG risks, such as the scheme’s ESG strategy not being aligned with business ambitions, is also weighing heavily on finance decision-makers (90 per cent), as are fears of data breaches (88 per cent).
Though reputational risk ranks as having the least risk on balance sheets, a significant number of finance decision makers said they were concerned about its overall impact.
