Tuesday 22 May 2012

Poll

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Covenant assessment

EMPLOYER COVENANT Keep an eye on it

Reviewing the employer covenant is a serious undertaking. Financial journalist, Allison Plager reports

Knowledge is power and trustees are undoubtedly required to know a lot about their pension scheme to perform their duties effectively. One area that has been growing in significance is the employer covenant. The Pensions Regulator website contains some useful guidance on what it expects trustees of...
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SPOTLIGHT ON DE-RISKING Trial of strength

The covenant comparison is key to pension plan buyouts, says Akash Rooprai, Mercer

A key consideration when buying out defined benefit pension liabilities is the strength of the chosen insurer’s financial covenant, compared to the existing overall covenant supporting the pension plan. It is not always a straightforward comparison but a robust investigation can help you...
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TPR publishes guidance on scheme security

The Pensions Regulator (TPR) has published final guidance for trustees to ensure there is adequate security for their pension scheme. This follows consultation over the summer and provides information on what trustees should do to measure and monitor employer covenant – and any subsequent...
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COVENANTS Promising situation

Assessment of the employer covenant is crucial to honouring the promises made to members says Ben Shaw, Occupational Pensions Trusts

The financial challenges of the last year have tested many employer covenants. But what is the employer covenant, what do trustees need to know about it and how could a weak covenant be used to the scheme’s advantage? Most companies originally set up defined benefit (DB) pension schemes...
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TPR revisits employer covenant

The Pensions Regulator (TPR) has published additional guidance on monitoring the employer covenant for consultation. TPR’s internal controls have also been revised. Bill Galvin, acting chief executive, TPR, warns: “Where trustees rely on an employer to underpin the risks of adverse...
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