Perspectives

This edition of Covenant Quarterly focuses on DEI in pension scheme boards. It also looked at the rising insolvency cases, the potential impact of collective defined contribution schemes and the 2023 Annual Funding Statement

Around the world, life expectancy has reached a record high. People are living longer than ever before – but they’re also retiring sooner, meaning that pensioners are collecting benefits for previously unimagined lengths of time.

With living to the age of a hundred and beyond becoming a realistic prospect for increasing numbers of people, it’s time to rethink our relationship with our future selves.

The importance of DEI in pension scheme trustee boards is gaining momentum. We recently held a roundtable event to discuss the topic in more detail and to explore the results from the DEI survey we conducted in partnership with mallowstreet.

The Annual Funding Statement appears to factor in some of the feedback on the draft Funding Code, providing more nuanced commentary on covenant and integrated risk management.
Emily Goodridge and Christopher Heritage summarise the key points here.

In line with expectations, the Bank of England once again raised interest rates on 23rd March. This is the 11th successive increase with rates now at their highest level since 2008 at 4.25%. The recent collapse of Silicon Valley Bank and the emergency purchase of its UK subsidiary by HSBC, not to mention the Credit Suisse turmoil, serve as a timely reminder that the impact of the rapid rise in interest rates globally has not yet been fully appreciated.

We recently commissioned research with Mallowstreet to look at the challenges and barriers to improving diversity, equality, and inclusion (DEI) across the pensions industry.

The latest covenant quarterly contains an overview of TPR’s draft funding code, a datawatch look at gilt yields, how covenant and investment strategy could be linked and solvency II reform.

At the end of 2022, The Pensions Regulator published its long-awaited draft Funding Code and consultation. We explore what the changes mean for pensions trustees in four short videos. Watch them to to find out more.

Based on Will Martindale’s experience, he has written his top 10 learnings on how a Chief Sustainability Officer (CSO) can most effectively support a firm in achieving its climate and sustainability objectives.

Sustainability is dominating Trustees’ agenda with climate change squarely at the top. But the other side of the climate change coin is biodiversity loss, a topic that deserves Trustees’ attention in its own right, with many experts considering it a threat more serious than climate change. Read the article by Will Martindale which appeared in the Pensions Management Institute’s Environmental, Social & Governance Report 2022.