High-level advice based on detailed asset, liability and risk information has historically been out of reach for all but the larger pension schemes, but technology is changing that
Manchester-based Mitchell Consulting has become the latest consultant to adopt RiskFirst’s risk analytics platform PFaroe, which now has over £150 billion of pension liabilities modelled on it.
Mitchell Consulting, which advises around 100 UK pension schemes, will use the platform to offer granular risk analysis, including asset-liability modelling, value-at-risk (VaR) analysis and sensitivity testing. In September last year, The Pensions Regulator announced that it would be using VaR information from scheme returns to assess the investment risk of defined benefit pension schemes.
Neil Mitchell, Managing Director and Founder of Mitchell Consulting, comments: “As the pensions environment evolves, more and more defined benefit pension schemes are becoming legacy arrangements for employers; making the management of risk and volatility a key concern. Yet, in general, access to highly specialised, case-specific funding advice has not been available to the majority of pension schemes at streamlined cost levels – this is where we come in.”
“We aim to provide cost-effective asset-liability modelling to a whole range of pension schemes, introducing many of the high-level ideas and concepts explored by the larger schemes to pension schemes of all asset bases,” Mitchell adds. “PFaroe will be vital to this approach, allowing a better understanding of risk exposure and enabling us to clearly convey complicated concepts and analytics to current and potential clients.”
Matthew Seymour, Managing Director, RiskFirst, comments: “Mitchell Consulting is an incredibly experienced firm and is breaking new ground in terms of the services it is offering to pension schemes in the UK. We see PFaroe as a tool that, given its flexibility, has application for schemes regardless of their size and we are delighted that Mitchell Consulting has enlisted it to help drive forward its business.”
About Mitchell Consulting
Mitchell Consulting Actuaries Limited is an independent firm of actuaries, pension consultants and pensions administrators based in Manchester. Mitchell Consulting was established in 1998 to provide practical and affordable actuarial, pensions consultancy and pensions administration services to UK pension schemes, and advises around 100 UK pension schemes, as well as providing support to other professionals.