Clarity and confidence in employer covenant advice
The Pensions Regulator’s funding requirements for defined benefit (DB) pension schemes require trustees to go beyond the traditional integrated risk management processes. They must have a longer-term plan that is explicitly linked to employer covenant strength and its longevity.
The key elements to assessing employer covenant include:
- Structural support: identifying the sponsoring employer and assessing the strength of its obligations to the scheme.
- Financial capacity: analysing cash flow and balance sheet strength to evaluate the sustainability of contributions.
- Business outlook: considering industry trends, competitive position, and general risks.
- Contingent security: reviewing the robustness of additional support arrangements, including contingent assets.
- Recovery strategy: advising on deficit repair plans that balance scheme security with affordability.
Our dedicated team provides an efficient service advising trustees on all aspects of assessing employer covenant. With extensive experience and a strong network, we assess risk, formulate strategies and offer guidance to implement effective solutions. We have a reputation for clear communication, being able to reduce a large amount of information to the key facts and issues and for negotiating robustly on behalf of trustees.
The flexible nature of our service means that trustees can choose the level of service. Some trustees only need a brief health-check on their sponsors, while others require comprehensive advice.
Our services
Employer covenant review
Our employer covenant review service reviews financial health, long-term resilience and strategic choices to help directors and trustees set appropriate pension scheme support. Using financial analysis and scenario-planning, we support compliance, reduce risk and promote sustainable pension funding.
Trustee support
We provide expert guidance to trustee boards on all employer covenant matters, including triennial valuations, monitoring, recovery plan negotiations and responses to transactions. Our guidance also extends to other key areas such as refinancing, restructuring and insolvency. Our tailored support helps trustees make informed decisions, ensuring pension scheme security while balancing employer affordability and long-term sustainability.
Pension scheme restructuring advisory
Restructuring an organisation with an associated DB pension scheme is inherently complex. Our experts bring together corporate restructuring and defined benefit pension expertise to deliver tailored, practical solutions.
Covenant monitoring
After the process is concluded, we provide light-touch, periodic covenant monitoring, tailored to meet the specific requirements of the trustees.
Contact us to see how we can help you and your organisation.
