The Pensions Regulator

Internal controls

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An example of the scheme risk-management process
Set objectives
Identify risks
Categories of risk
Define success criteria
Assess risks
Produce action plan
Implement action plan
Monitor and review

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An example of the scheme risk-management process

The code of practice recommends a risk-management approach as a means of meeting the requirements set out in the regulations. The risk-management process you use, and the steps followed to identify key risks, will probably look similar to this:

 

This guidance provides:

• an explanation of the purpose of each step;
• a description of the activities that you might need to carry out at that stage; and
• details of the likely outcome you will need to carry forward to the next step in the process.

You may want to tailor the process to suit your scheme, taking advice if appropriate from those with experience in implementing systems of internal control. If you are involved with a larger scheme, you may already have worked closely with internal and external advisers to make sure that the systems put in place are fit for purpose.

We recognise that smaller schemes may benefit from some guidance on risk management procedures and we have produced this guidance accordingly.

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