The employer covenant is the extent to which a defined benefit pension scheme can rely on the financial support of its sponsoring employer.

Trustees need to understand the strength of the employer covenant as an integral part of the risk management of their pension schemes. The covenant will help shape trustees' funding objectives as well as driving their appetite for investment and funding risk in pursuing those objectives. The Pensions Regulator expects trustees to manage their exposure to covenant, funding and investment risk in an integrated way.

Employers need to understand the extent to which risk in their pension scheme can have an impact on the financial health of their business. Understanding how trustees approach covenant risk enables employers to work effectively with trustees to help keep pension costs manageable.

We believe it is important to understand both trustee and company perspectives to provide effective advice. That is why we advise both trustees and employers on how to manage their covenant risk.







Integrated covenant advice

© Argyll Covenant Advisory Ltd 

Our approach
Our experience