Press releases

Deloitte comments on today's guidance from the Pensions Regulator on employer covenant

13 August 2015

Simon Kew, from pensions advisory at Deloitte comments on today’s guidance from the Pensions Regulator (TPR) on how to assess and monitor employer covenant:

“The guidance reinforces the principle that assessing covenant, including an appreciation of wider market dynamics, is not a ‘one-off’ process. Monitoring should be in force, along with appropriate triggers, to ensure that trustees can react nimbly and appropriately to changes in covenant. This monitoring should run alongside planning for potential outcomes in investment or funding assumptions, through ‘stress-testing’.

“The guidance also puts objectivity centre stage, very clearly flagging that the regulator would expect the trustees to bring in external advice where there is a ‘failure to agree’ with an employer or a conflict of interest on the trustee board.

“Complex modelling can be interesting, but ultimately whether a sponsor can fund the scheme from cashflow now and in the future is the key. While there are no new revelations in today’s documents, we believe that this guidance will be helpful for trustees, sponsors and their advisers in offering checklists and examples of situations they may find themselves in.”


Notes to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Will Black
Deloitte LLP
+44 (0) 20 7007 8242
+44 (0) 78 2511 3222

Did you find this useful?