The Pensions Regulator issues new guidance for Defined Benefit Employer Covenant

Thursday 5 November, 2015

The Pensions Regulator has produced some guidelines so pension trustees can apply the Defined Benefit funding code of practice.  The guideline includes user friendly examples, checklists and various scenarios and an integrated approach to risk management.

According to The Pension Regulator ‘The publication provides good practice guidance on how to assess and monitor an employer’s covenant, the employer’s legal obligation and financial ability to support their scheme.’ (source:The Pensions Regulator)

Richard Porter Independent Financial Adviser and Director of Lonsdale Benefit Consultants in St Albans said:

‘the handbook will be useful for all trustees as they need a very good understanding of the covenant so they can adopt a sensible approach to risk management.  The guidelines will help trustees agree who should assess the covenant, how to monitor the covenant and how they can improve the security of the pension scheme.’

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