It was instructive to watch the UK's Chancellor, Mr Osborne, describe yesterday’s horrendous GDP figures as “disappointing”. That’s like Team GB finishing below Guatemala in the medals tables and calling it "unhelpful".
Of course, the English genius for understatement is the stuff of legend. “I’m not entirely convinced” means “I profoundly disagree” and “I take your point but…” translates as “you must be off your rocker”. But even for a chap schooled from birth in the art of playing it down, Mr Osborne's expression of mild disappointment as he surveyed the crumbling architecture of his economic master-plan, was woefully insufficient for the moment.
For this was no ordinary set of poor numbers. The confirmation that the economy has shrunk by 0.7% during the last quarter, and remains languidly depressed despite the quinine-bitter pill of austerity, is an unmitigated disaster for the besieged Mr Osborne. And that’s an understatement. When Vince Brutus-Cable is being lined up to replace you as Chancellor, you know it’s gone horribly wrong. Disappointing, even.
The moral of this sorry tale, then, is that it is perfectly possible to embark on a plan to turn things around, and to fail in your mission. The bitterness of the pill is no indication of its likely success. The only guarantee that the patient will recover, is to make the right initial diagnosis and then deliver the correct treatment, in time.
And so to pension plan risk management. If the most recent figures from the actuary indicate that your defined benefit pension plan’s deficit is still rising, it’s a clear sign that you are in Osborne territory. The trustees' plan isn’t working; probably because someone made the wrong diagnosis, prescribed the wrong treatment and refused to change it. 
If your DB pension plan is in trouble (for which, read: badly underfunded and fast getting worse with only a vaguely articulated "hope of eventual recovery"), here are four steps for immediate implementation:
1. Upgrade the governance and quality of the decision-making team (not hard once you have the mindset);
2. Carry out an urgent and sophisticated MRI of the pension plan (not difficult, given the analytics tools widely available);
3. Establish a rapid but clear plan of action that is better than the current one (really not difficult, with the right advice);
4. Optimise the risk/return profile of the assets and liabilities (undeniably challenging, but not impossible).

[Please note that all opinions expressed in this blog are the author’s own and do not constitute investment advice.  Click here for full disclaimer]

Author: Dawid Konotey-Ahulu

I spend my life trying to find better ways to do things. For my clients (pension funds) that pretty much involves challenging the status quo at just about every turn. I left Merrill Lynch in 2006 because I listened to my clients. They questioned the model and told me there had to be a better way. They were right. Wisdom of the Crowd. I am the co-founder of two companies: Mallowstreet (FB for the pensions industry) and Redington ("know your kung fu" consulting for the pensions industry).