Risk Management

To ensure the Plan remains sustainable, the teams strive to find the best balance between risk tolerance and the ability of Desjardins and its employees to finance the Plan. In order to do so, all risks, from interest rate fluctuations to increasing Plan members' longevity, are identified, assessed and mitigated. Stress tests are performed to get more insight into the dynamics of assets and liabilities and their impact on the Plan. Control measures, the strategy adopted, actions taken, tracking indicators and corrective and mitigation measures associated with each risk are clearly defined and assessed on an ongoing basis. The action plans established for every risk are included in the DGPP's business plan, which puts risk management at the heart of all Plan initiatives.

Main risks

Decline in interest rates
A decline in interest rates could have a negative impact on the Plan's financial situation, especially when evaluated on a solvency basis.

Return volatility
Financial market volatility could lead to negative returns, which would impact the contributions needed to fund the Plan.

Appropriate investment strategies
Poor decisions and failure to execute could prevent the Plan from achieving its strategic objectives and meeting its obligations.

Plan members longevity
Plan members living longer than expected or updates to mortality tables could drive costs up.

Liquidity
A certain amount of money is required for the Plan to fulfill its financial obligations at all times.

Measures taken

A diversified and resilient asset allocation strategy
Assets are allocated dynamically and based on risk coverage. The allocation aims to maximize the Plan's resiliency with as many economic scenarios as possible and to ensure cost-effective funding.

A rigorous and forward-thinking investment plan
The investment plan helps establish the strategic vision and the key objectives for each asset class in order to guide investment decision-making.

Optimized liability matching
Investing in certain asset classes, such as fixed income securities, real estate and infrastructure, helps protect the Plan against interest rate fluctuations. Moreover, a bond overlay strategy also optimizes matching while resulting in higher expected returns.

A customized mortality table
To better estimate how long Plan members will live, the Plan has customized the standard Canadian mortality table by considering actual DGPP members' experience and socio-economic analyses.