Funding and Journey Planning
We believe that an understanding of employer covenant’s affordability, visibility and reliability can be invaluable as you choose your path to a Long-Term Funding Target (LTFT) and the level of that target itself.
All our covenant advice includes specific conclusions to support your journey planning and setting a LTFT, centred around:
- affordability (i.e. near-term support);
- visibility (i.e. medium-term certainty of performance); and
- reliability (i.e. the long-term potential of the covenant).
Integration of covenant and investment advice
Successful journey planning is a process of balancing covenant, funding and investment factors to develop a long-term strategy for a scheme. In essence, when you prepare your journey plan, you’re balancing the end point you wish to reach with how you choose to make the journey. Our approach to the integration of covenant and investment advice has journey planning at its heart.
ESG and sustainability integration
Most pension scheme sponsors face challenges from environmental, social and governance (ESG) factors – climate change in particular. While much thought has gone into identifying sustainable investment, trustees and sponsors are also now beginning to think about the impact of ESG risks on the employer covenant.