Pension Funds

Pension Funds

KPMG provides pension funds with Audit, Tax and Advisory services delivering a holistic approach to analyze problems and deliver integrated services.

KPMG provides pension funds with Audit, Tax and Advisory services

KPMG’s global pension practice (PDF 742 KB) can help you effectively deliver great results. Our member firms provide our pension and superannuation clients with a range of services across Audit, Tax and Advisory practices, delivering a holistic approach to analyze problems and deliver integrated services. 

Ensuring a sustainable retirement plan is a global challenge. Plan sponsors, governments and the industry are constantly challenged to make informed decisions which will meet organizational as well as members’ expectations. Our clients are changing their investment portfolios to deal with the low interest rate environment or changing the risk characteristics of their pension plans to better align assets and liabilities. Many of our largest pension clients are also reaching out to other global institutional investors to understand and benchmark their operations and governance to determine best practice, operational efficiencies or identify organizational shortcomings for the purposes of reducing risk. KPMG, through our Global Pension Group (PDF 742 KB) as well as our large global financial services and government practices, is well positioned with the skills and the team to bring forward innovative strategies which will address the needs of public and private sector pension funds. Our global team combines deep technical pensions experience with a breadth of commercial and business understanding and with local market insight. We have extensive industry knowledge through the various roles we play as auditors, tax advisors on plan design, direct investment or tax reclaims on investments or other traditional advisory services that include information technology services, internal audit co-sourcing, enterprise risk management, or as transactions advisors. KPMG member firms develop and deliver strategies, to meet financial objectives and wider business objectives such as managing risks including reputational risk.

Here are some examples of how we can help you.

Understanding member churn in a fund identified 90 percent of exiting members

A superannuation fund witnessing a substantial decline in members asked us to help improve member retention. There was a need to understand the drivers behind members leaving, quantify the number of members and funds under administration at risk, and develop tailored retention strategies. The data analytic approach taken was to combine multiple data sources (contact, member and transaction data), to produce a single member view. A predictive model was then built based on five years of historical data of prior member exits. Based on the model, each member was scored based on their likelihood to exit on an ongoing basis. Dashboards were then developed for the retention teams to monitor attrition risk on an on-going basis, which included the key variables, member scores and tailored pro-active retention strategies.

A risk assessment enabled trustees to have more meaningful discussions with third-party managers

A large corporate pension fund with over $11billion in assets had appointed a number of third party investment managers to manage specific parts of the overall portfolio of assets. As part of their fiduciary responsibilities, the scheme trustees needed expert assistance with the ongoing monitoring and assessment of the operations in place at the third-party managers in multiple countries. The approach taken was based on a risk assessment initiated by KPMG in the UK. A monitoring review program was developed and the priority of each manager established. Owing to the specialized nature of some of the mandates, specific procedures were tailored to the different asset classes. A specialist was also provided to help conduct the third-party manager reviews of their performance and areas and formally report the results to the trustees at their quarterly oversight meetings.

Investment portfolio expansion leads to tax function design analysis

A large North American based pension group expanded its investment portfolio into new and complex asset classes. The pension identified the need to analyze their tax capabilities and group function design in light of the increased investment activity. Prompted by board related inquiries, and informed by insight provided by KPMG in the US, the chief financial officer (CFO) pursued a tax function design project. The project outline involved the development of tax related processes, procedures and materials (such as report templates and guidance) to help ensure the integration of tax related risk considerations/requirements into investment, risk and compliance group functions. Ultimately, the adoption of process improvements is anticipated to mitigate enterprise risk for the pension group.

For more details, please download our brochure (PDF 742 KB).