An index measuring the importance that plan sponsors ascribe to certain risks associated with the management of their pension plans is at its highest in four years, according to a new report.
MetLife Inc., New York, published this finding in a summary of results from its fourth annual study, The MetLife U.S. Pension Risk Behavior Index, which surveys risk management attitudes and aptitudes among defined benefit pension plan sponsors. Conducted with research partners Bdellium Inc. and Greenwich Associates between September and December of 2011, the study surveyed 156 large plan sponsors, of which 95 reported defined benefit assets of more than $1 billion.
The survey pegs its Risk Importance Concentration at 40%, up from 37% in 2011, 1% in 2010 and 30% in 2009. The measure, says MetLife, indicates that plan sponsors are differentiating among 18 risk factors to a large degree and focusing on specific risks they believe have the greatest impact on their plans.
Since the study's inception, data from the research have been used to calculate an index value for the U.S. PRBI. The data, says MetLife calibrate the importance that surveyed companies ascribe to managing each risk, their reported success at implementing comprehensive practices to manage each risk and the consistency between the two, measuring both attitudes toward, and aptitude for managing, pension plan risks.
The 2012 PRBI study reports an increase in success ratings that measure how strongly plans sponsors agree with statements that describe successful management for each of 18 risk factors. The rating is used as a proxy for how successfully plan sponsors believe they are implementing comprehensive measures to manage each risk.
The survey finds that 83% of all ratings indicated success (i.e., rated a 4 or 5), compared to 79% in 2011, 80% in 2010 and 75% in 2009.
Complete survey results can be found here.
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