Covenant reporting, monitoring and advice
What exactly is a covenant?
Employer covenant is the strength of the business supporting a pension fund. It is defined by the Pensions Regulator as ‘the extent of the employer’s legal obligation and financial ability to support the scheme now and in the future’. It is the ultimate support for the funding and investment risks faced by a pension scheme. Understanding the quality of this support and the risks associated with it is fundamental to fully integrated risk management. It’s at the heart of what we do.
Affordability is a complex challenge
With pension deficits remaining at historically high levels, and many sponsors suffering from the impacts of Brexit and COVID-19, the affordability of contributions is often a complex challenge that requires a careful balancing of competing demands on cash flows.