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We understand how challenging it can be for trustees and employer companies of defined benefit schemes to navigate the complexities of pensions legislation. From our insight of the market place, Irish pension scheme trustees are paying more attention than ever before to the quality of covenants.
Of course, the strength of a covenant can change if the sponsoring employer is experiencing difficult trading conditions. If the employer fails, trustees face substantial personal risk. To mitigate these risks, RSM offers independent covenant assessment services , tailored according to the scheme’s circumstances.
Our covenant assessment team can provide services which will:
- enable trustees to comply with pensions regulation by forming objective assessment of the scheme;
- test employer’s financial durability and ability to meet financial commitments of the scheme;
- monitor the covenant;
- alleviate trustees’ possible conflicts of interest;
- reduce personal risk for trustees ;
- manage any potential conflicts between trustees and employers in an effective manner.
Our conclusions will focus on:
- setting funding and investment risk parameters;
- negotiating and agreeing affordable contribution levels and a deficit recovery period;
- requesting and obtaining formal security or other contingent assets; and
- establishing the level and focus of monitoring activity required.
