Ortec Finance: Pension funds forsee increased risks to both assets and liabilities in 2025

Ortec Finance: Pension funds forsee increased risks to both assets and liabilities in 2025

6 februari 2025

Risicomanagement Pensioenfondsen
Pensioen (08) sparen geld

Coming into 2025, many pension fund executives are looking at what poses the biggest risks to their plans on both the assets side and the liabilities side. In fact, 77% of pension fund executives expect the coming year to bring an elevated risk profile, according to a new global survey from Ortec Finance.

The survey targeted senior pension fund executives in the UK, US, the Netherlands, Canada and the Nordics whose funds collectively manage $1.451 trillion in assets.  Of those surveyed, 54% said the risk profile of their pension fund will increase slightly for the coming 12 months, with another 23% believing their risk profile will increase dramatically. Only 18% believe their risk profile will stay the same in 2025.

Diving into the largest risk drivers, managers report a mixture of concerns which stand to impact both the assets of their pension funds as well as their expected liabilities. When asked to rank their largest risk concerns, the top five risks in order of concern are: market volatility, cybersecurity, inflation, interest rates and regulatory. At the bottom of the risk concerns are liquidity and geopolitical risks.

From the assets side, market volatility and inflation stand to potentially erode asset value, while from the liabilities side, rising longevity poses a risk of increasing liability value. Looking closer in on the liabilities side, 77% of those surveyed believe the increasing number of retirees relative to the number of new hires in Defined Benefit plans poses a significant or slight risk to the Defined Benefit Pensions industry.

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