Pension schemes should consider whether taking a wait and see approach to de-risking is the right strategy, according to KPMG.
In an advisory paper on de-risking publishedyesterday, the consultants said that the 'popular approach' where trustees plan for de-risking when conditions improve does nothing to manage their risk today.
Jon Exley, investment advisory partner at KPMG in the UK, said: 'Developing theoretical and administratively complicated strategies on how to de-risk at some time in the future when conditions improve is rather like spending your time planning how to spend lottery winnings.
'So called "dynamic de-risking" where trustees agree to future changes in investment strategy depending on certain triggers being met is, unfortunately, all too often a misnomer as delaying action until the good times is hardly dynamic and it doesn't really reduce risk.'
In the paper, KPMG explains that the 'wait and see' approach runs the risk of conditions never improving. This would mean no de-risking takes place, and KPMG said it was important schemes consider the full range of de-risking options available to them.
Mr Exley said: 'Everyone hopes that the economic situation will improve but "hoping for the best" should not form the basis of a de-risking strategy, especially where there are almost always significant opportunities to reduce scheme risks by taking action sooner rather than later.'
Among the tips made in the paper are for schemes to take a constant level of risk over time and to be aware that de-risking strategies can be compatible with existing monitoring cycles.