Allowing for the sponsor covenant in actuarial advice

Document description

This report is concerned with actuarial advice in relation to defined benefit pension schemes and covers the following: Section 2 summarises the WP’s recommendations. Section 3 discusses the nature of the sponsor covenant. Section 4 considers the issues arising from taking explicit account of the sponsor covenant in actuarial advice. Section 5 summarises the principal current ways of assessing company credit quality that can be adapted to help trustees assess the sponsor covenant. Section 6 sets out our thoughts and recommendations on how an assessment of the sponsor covenant can be incorporated into actuarial advice in practice.