From the viewpoint of the plan sponsor, risk is measured not only by movements in the assets, or even the surplus, but also by the ultimate effect on the economic value of the firm. Thus, pension plan management should be integrated with the overall financial goals of the plan sponsor. This is in line with the trend toward enterprise-wide risk management.

Things to Remember

1. Pension plan management should be integrated with the overall financial goals of the plan sponsor. This can facilitate better decision-making and risk management, and ensure that the pension plan contributes positively to the firm’s financial health and stability.

2. Risk reports are an important tool for managing pension plan risk. They provide valuable information about the pension plan's financial situation and risk exposure, which can help the company to manage the pension plan more effectively.

3. The frequency of risk reporting should be balanced with the quality and relevance of the information. While it is important for the board to be informed about the pension plan's risk situation, increasing the reporting frequency might not be the most effective solution, and could even lead to information overload.

4. Enterprise-wide risk management is a holistic and integrated approach to managing all risks that a firm might face. It aligns with the trend towards integrating pension plan management with the firm's financial goals.