NETHERLANDS – A survey of more than 50 experts has shown that system risk is currently the Dutch pension industry's most worrying "non-quantifiable" risk.

IPE sister publication IPNederland conducted a straw poll of more than 30 pension funds and 20 investment consultants at IPN's conference on non-quantifiable risks earlier this week.

Before the start of the conference, delegates were asked to give their opinion on five specific risks, including superviser risk, system risk, career risk, outsourcing risks associated with fiduciry management and legal risk.

Respondents were asked to grade their concerns over each particular risk on a scale from 1 and 10.

Outsourcing risks related to fiduciary management were deemed the least worrisome, with an average score of 5.3, although as one of the respondents put it, "these risks increase as fiduciary managers in turn outsource to more underlying managers".

Legal risks were considered mildly worrisome at 5.5.

Career risk and supervisor risk – both of which deal with the dangers of herding, while the latter also involves risks associated with regulatory change – shared second place on the 'most worrisome' chart, both with an average score of 5.8.

System risk topped the chart with an average score of 6.1.

Although average scores were similar across the various risks, there was significant variation among individual responses.

Asked about their worries over system risk, for instance, 15 respondents graded their concerns at 8 or higher, while the same number graded their worries at 4 or lower.

The survey also yielded an intriguing difference between pension funds and investment consultants.

Among pension funds, system risk clearly topped the chart at 6.2, but superviser risk came in a strong second at 5.9.

Consutants, however, worry most about career risk (6.3), followed by system risk (5.7).