As closed final salary pension schemes wind down, the emphasis on measuring, managing and controlling the financial risks will grow, according to Watson Wyatt

Recent poor returns on investment and the expense of providing pensions as people live longer are putting companies under pressure.

Talking to Alan Pickering in a Watson Wyatt 'Rewarding Conversations' web-based video interview, Adrian Mathias, a partner at Watson Wyatt, said: "We are increasingly advising companies on the management of investment risk through risk budgeting. This is based on asset liability modelling, design of investment management structures, and selection of the right managers.

"Much more attention is being placed on matching expected benefit outgo with the most appropriate type of investments, thus reducing investment risk."

The video can be viewed at: