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Employer Covenant Assessment for Trustees

Commentary from the Regulator has created an expectation that Trustees will actively monitor the strength of the Employer Covenant. However, Trustees do not necessarily have a background in finance and where they do (e.g. finance director) there may be a perception of a conflict of interests between their roles for the Company and as a Trustee. Consequently assessing and monitoring the performance of the business can be challenging.

We help Trustees to navigate this process by providing independent advice in the following key areas:

  • Employer and Scheme Events
    • understanding the impact of the event on the employer covenant and the Scheme’s position
    • considering the appropriateness, level and nature of any mitigation required
    • providing support through negotiations and, potentially, tPR clearance process
  • Scheme Funding – the triennial valuation process
    • assessing the strength of the employer covenant, summarising findings in clear, straightforward terms
    • considering term and affordability of recovery plan, including assessing or suggesting alternative mitigation solutions
    • support through funding and recovery plan negotiations
  • Ongoing monitoring
    • developing monitoring “dashboard” to simplify and improve effectiveness of employer covenant monitoring
    • providing regular or ad hoc update covenant reviews

For more information please contact Tom Partridge (London and South East), Matt Cowlishaw (Midlands) or Martin Barron (North and Scotland).

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