TPR sets expectations on “hidden” concentration risks in pension portfolios

For compliance teams, this is a governance and oversight priority rather than a narrow reporting exercise. Firms should expect greater scrutiny of how exposures are aggregated on a look-through basis, how risk appetite is set, and how advisers and managers are challenged. Practical next steps include mapping concentrations across all mandates and vehicles, assessing correlation, liquidity and collateral interdependencies, strengthening trustee reporting, and documenting escalation and mitigation.

Pension schemes, asset managers and advisers should review existing investment governance arrangements and ensure concentration risk is explicitly captured in risk registers, monitoring packs and scenario testing. Smaller schemes may rely on advisers, but trustees remain accountable for oversight. The release does not create a standalone new rule, but it raises supervisory expectations and increases the risk of challenge where concentration risk is not visibly managed.

Firms that can demonstrate transparent exposure aggregation and robust trustee challenge will be better positioned; those relying on siloed manager reporting may face remediation costs and reputational scrutiny.