How to make your own risk assessment as efficient as possible

With less than 3 months until the first scheme Own Risk Assessment (ORA) deadlines are upon us, we’ve been working with a variety of schemes during the past few months to ensure that the trustees can prepare their compliance statement with confidence.
Here are a few of our top tips for ensuring you make the assessment process as efficient as possible:

1.

Start early – don’t leave the assessment until the last minute, even for very well governed schemes, gathering evidence to demonstrate compliance can take time.

2.

Don’t underestimate how important it is to have a robust document library and audit trail. Considering whether your document management system is fit for purpose, and if it’s being maintained correctly are key to success for the assessment phase.

3.

Your compliance statement doesn’t need to be a lengthy document. However, it should include the outcome of your assessment, and importantly any agreed actions for improvement, but it does not need to include every element of detail.

4.

Your assessment can lean on good work your scheme has already done with its effective system of governance. If your ESOG is fit-for-purpose, then much of what trustees need for the ORA assessment will already be available. Details can be recorded within working documents and referred to as evidence, as part of your audit trail. This avoids unnecessary duplication of work at what can otherwise feel like a busy time.

5.

The assessment and compliance statement is not a duplicate of (or a replacement for), your risk register or internal controls procedures. The assessment may highlight areas that need to be included within these documents, but it serves to enhance the governance of the scheme by ensuring trustees have visibility of their areas of improvement.

6.

Your ORA should always remain proportional to the size, nature and complexity of your scheme. Whilst a thorough assessment of your scheme’s activities is required by The Pensions Regulator, it’s important to remember that different things are expected of small, medium and large schemes. Trustees should consider where their scheme sits and what resources are required to deliver an accurate assessment.

When planning your approach, you should aim to do the administrative, organisational and governance basics really well. This should enable you to perform your assessment in an efficient and cost-effective way.

As ever, trustees should be mindful that whilst they can delegate some of the responsibility for carrying out assessment activities, gaining independent views and expert opinions, they cannot delegate overall responsibility and remain accountable for compliance with the Code of Practice. 

For more information, you can watch our ORA video below or learn about our general code services.

Kelly Newton

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