Which of the following is NOT listed as a main risk to pension funds that advisers should disclose?

• A. Investment risk
• B. Longevity risk
• C. Interest rate risk
• D. Inflation risk

Answer: (C)

The key idea here is which risks advisers typically emphasize to clients about pension outcomes. Investment risk reflects fluctuations in asset returns that can affect the fund’s ability to meet promised benefits. Longevity risk is the danger that members live longer than expected, increasing the cost and duration of pension payments. Inflation risk is the risk that rising prices erode the real value of benefits over time, which matters for maintaining purchasing power.

Interest rate risk is important and influences both asset values and how liabilities are valued, but it is usually treated as part of investment risk or funding considerations rather than a separate, standalone risk to disclose. In the standard client-facing disclosures, the three primary risks highlighted are investment risk, longevity risk, and inflation risk, which is why interest rate risk isn’t listed as one of the main risks.