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Integration of covenant and investment advice

Understanding your journey

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. You can make that journey by relying on your investment performance and your assets. But you can also make the same journey by relying on contributions from the company that ultimately sponsors the scheme. So it’s a question of balancing covenant and investment advice in terms of:

  • What do you invest in?
  • How much do you ask your sponsor to pay?


Our approach to the integration of covenant and investment advice has journey planning at its heart.

Balancing covent and investment advice

  • We define covenant ratings by the likelihood of the scheme meeting member benefits in full over the scheme’s life. In other words, our ratings do not focus on near-term forecasts or recent balance sheets.
  • To help you set your decisions in a clear context, we provide journey planning factors (around the affordability of contributions in the near term, the visibility of cash flows and assets over the medium term, and the long-term reliability of the employer covenant) for every covenant assessment.
  • We can also perform a tailored ESG analysis for every covenant assessment, to ensure that ESG factors are not neglected in your long-term plans.

Award-winning tools

To further assist you, we have developed a range of unique, award-winning tools to increase your understanding of risks and opportunities, and to help you maximise the potential of where you stand today. These include:

  • PensionSketch , a journey plan modelling tool built with covenant risks at its core;
  • PensionSim , an integrated ‘flight-simulator’ that allows users to try new approaches and learn in a safe environment; and
  • MACCI (our Methodology for Analysing Climate Covenant Impact), a first-of-its-kind modelling tool that highlights employer covenant risks in specific climate scenarios.