Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-05T21:03:45.945Z Has data issue: false hasContentIssue false

8 - Employer support and the development of the sponsor covenant concept

Published online by Cambridge University Press:  05 July 2011

Paul Thornton
Affiliation:
Gazelle Corporate Finance
Donald Fleming
Affiliation:
Gazelle Corporate Finance
Get access

Summary

The need to incorporate the ‘sponsor covenant’ and to take account of the impact of corporate events on the pension scheme’s position has long been implicit in trustee decision-making. However, it is really only in the last five years that this has been explicitly a key agenda item for trustee boards, not least through the encouragement and formal pronouncements of the Pensions Regulator (TPR). Having a framework for assessing and reviewing the covenant is now an integral part of good scheme governance because it puts trustees in a good position to make appropriate decisions about scheme funding and corporate events which may affect the employer’s ability to fund their scheme.

With trustees increasingly expected by TPR not just to establish a framework to monitor the sponsor covenant, but also to have a ‘seat at the table’ alongside the company’s other major stakeholders, the relationship between the trustee board, the employer and third parties has changed. We consider in this chapter how the concept of the ‘sponsor’ or ‘employer’ covenant and the changes in relationships and expectations placed on trustees are affecting scheme governance.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×