Certificate in Risk Management for Pensions (CertRMP)

Course overview

The Certificate in Risk Management for Pensions (CertRMP) provides detailed knowledge of the legislative and regulatory framework surrounding pensions, including the role of trustees, risk management implications and associated governance issues. It explores the impact of the pension fund on the cost of capital, helping you to manage the financial assets of the business and address funding requirements.

CertRMP counts towards the AMCT Diploma in Treasury as one of the stage three electives as well as being available as a standalone certificate.

Important information

The specialist nature of CertRMP has resulted in limited demand for the qualification. The last examination will be in October 2009. Courses up to and including that examining in October 2009 will be fully supported with tuition and examinations. Enrolments for CertRMP will be accepted up to 31 May 2009.

If you wish to enrol for CertRMP, the remaining examination sittings for the certificate are October 2008, April 2009 and October 2009.

Current ACT student? Please visit the Student Area

*Fees for these courses may be subject to change

Course objectives

• Create a thorough understanding of how to analyse and manage the risks associated with company pension funds
• Provide detailed knowledge of the legislative and regulatory framework surrounding pensions
• Explore the impact of the pension fund on the cost of capital.

Who should take this qualification?

This is a valuable qualification for any finance professional looking to create an integrated approach to pensions risk management. In particular, it is relevant to:

• Treasurers, and those in their team with responsibility for their companies’ pension funds
• Finance directors/CFOs who oversee their companies’ pension funds
• Risk managers whose portfolio of products includes pension funds
• Pension Fund Trustees
• Financial consultants and analysts
• Anyone with an interest in, or a need to understand, the impact of the pension fund on an organisation.

Learning outcomes

Following completion of the course you will be able to:

• Understand key aspects of the UK pensions framework and provision and compare these with other key jurisdictions
• Compare and contrast the management of various types of company pension
• Explain the roles and responsibilities of those associated with the management of a pension scheme
• Understand and describe the financial risks associated with pension funds for both the fund and the company
• Identify and assess your company’s pension risk exposures and the strategies to manage them
• Discuss the constraints/inhibitors to actions or decisions associated with risk management.

Course content

The CertRMP syllabus creates a thorough understanding of pensions management and risks from the point of view of the finance professional. It enables you to analyse your own company pension scheme, discuss issues you may be facing and assess other company schemes.

Study Unit 1 – The Pensions Framework

The historical context
The macroeconomic context
Education, work and retirement
Income in retirement
Funded and unfunded pension schemes
Occupational pension schemes and their sponsors
The nature of pension liabilities
The pension augmented balance sheets
Pension schemes and the cost of capital
Risk budgeting
Asset-liability management
Pension security and guarantee arrangements
Arrangements in different countries

Study Unit 2 – Legislation and Regulation

Trusts, trust law and pension schemes
The Pensions Act 2004 and other legislation
The Myners Report and recommendations
Single and multi-employer pension schemes
Mergers and acquisitions
Effects of recent legislation and guidelines
Regulatory and other bodies
The European dimension

Study Unit 3 – Scheme Roles and Responsibilities

Scheme professional advisers
Pension support organisations
Conflicts of interest
Conflicts of interest overseas

Study Unit 4 – Reporting, Accounting, Taxation and Contributions

Scheme Reporting
Employer company accounts
Taxation
Tax and funding strategy
Statutory contributions

Study Unit 5 – Defined Benefit Scheme Valuations and Funding

Actuarial assumptions and principles
Key liability valuation assumptions
Actuarial valuations
Principles of funding
Funding methods
Company creditworthiness considerations
Liability management
Comparative valuation bases

Study Unit 6 – Defined Benefit Scheme Investments

Monetary, real and absolute return assets
Portfolio construction
Diversification
Fixed income securities
Index linked securities
Equities
Convertible securities and warrants
Property
Cash and floating rate notes
Hedge funds
Overseas markets and foreign currency investments
Annuities
Mortality bonds and longevity bonds
Derivatives
Investment management
Portable alpha
Legal issues and pensions investment

Study Unit 7 – Technical Aspects of Risk Management for Pensions

Fixed income securities basics
Portfolio diversification
Fundamental concepts of asset liability management
Cost of capital

Study Unit 8 – Integrated Risk Management for Pensions

Financial risks
Insurable risks
Operational risks
Governance

Study tools

• A comprehensive course manual
• Interactive tuition seminars
• e-learning website providing access to the course manual, past exam papers, glossary and course tutors

What’s included: Course manual (print and online), access to the e-learning website and tuition.

You will need: Access to a computer with internet connection and a calculator (scientific calculator with a powers (^ or x^y key) such as the Casio FX 83 or Casio FX 85.

Entry requirements

Due to the course being written and examined in English, students will need to possess a good standard of both written and spoken English.

A reasonable understanding of the fundamentals of taxation in the UK is assumed along with a good working knowledge of the following:

• Discounted cash flow techniques: including present value, annuities and deferred annuities
• Debt capital market instruments: including government bonds, corporate bonds, index linked bonds, zero coupon bonds
• Derivative instruments: including interest rate swaps, forward exchange contracts, futures, options
• The arithmetic of bond coupons and yields, yield curves and related topics: including clean and dirty prices, volatility, etc.
• The Value at Risk approach to financial risk management.

Reading material is available to update your knowledge in the above areas.

Tuition and revision

There are four face-to-face tuition days to reinforce and deepen understanding of the core principles and analytical tools from your manual. These tools are then applied to analyse current problems facing companies and trustees, including those faced by your own scheme.

Tuition is delivered in a seminar format with break-out sessions to provide valuable opportunities to exchange ideas and insights with fellow finance professionals. Optional end-of-day sessions led by experienced practitioners will provide further opportunities for related discussion and debate. The final day looks at exam preparation techniques, tutor-structured solutions and exam standard question practice.

Key areas covered include:

• Pension schemes regulation, law and practice
• Calculating pension liabilities: interest rates, inflation and longevity
• Modified duration, modified convexity and immunisation
• Pension fund investments, asset-liability management and liability driven investment
• Diversification, correlation and Value at Risk
• Pensions related financial statements analysis
• Recent developments.

• Meet the tutors

Assessment and examination

Students are assessed by a three-hour written exam.

The mark you need to achieve a pass in all papers apart from CertITM is normally 50%. For CertITM the mark you need to achieve a pass is normally 70%. This higher mark is accounted for by the fact that in a multiple choice examination, marks may be gained by guessing the correct answer.

How can I enrol?

To enrol on CertRMP as a standalone certificate please complete and return the enrolment & booking form (PDF 81K) to the ACT by the enrolment deadlines:

30 November for April examination
31 May for October examination

• Download enrolment & booking form (PDF 81K)

To enrol on CertRMP as part of the AMCT Diploma in Treasury go to the AMCT page.

The last examination for CertRMP will be in October 2009 and enrolments will be accepted up to 31 May 2009.

Continuing your studies

Once you complete your Certificate in Risk Management for Pensions you are eligible to join the CertRMP affiliates scheme – an exclusive network of treasury and finance professionals and to use the designatory letters, CertRMP. As well as a standalone qualification, you may also count CertRMP as one of the seven papers that comprise the AMCT Diploma in Treasury – the ACT’s core treasury qualification.