Employer Covenant Reviews 
An important duty of trustees of defined benefit pension schemes is to understand the financial health of the sponsoring employer(s) and their ability to meet the obligations of the scheme.
In some scenarios it may be pertinent for an independent report to be commissioned by the pension trustees, for example, in times of financial instability, significant corporate restructuring or when an organisation is involved in an acquisition or merger. Our experience in evaluating the implications of corporate change on an employer’s ability to meet its pension obligations can provide valuable support to trustees.
Example case
During the process of a FTSE 250 company’s acquisition of a competitor business, we were asked by the target firm’s pension trustees to investigate the implications and risks associated with the deal. Following analysis, we were able to advise the trustees that the acquisition would not have a detrimental effect on the employer’s covenant.
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