Book contents
- Frontmatter
- Contents
- Figures
- Tables
- Contributors
- Abbreviations
- 1 Introduction
- 2 Regulatory and supervisory context for occupational pension provision
- 3 Pension funds and the capital markets
- 4 Social responsibility and fiduciary duties of trustees
- 5 Good trusteeship
- 6 Conflicts of interest
- 7 The pension scheme in the employment package
- 8 Employer support and the development of the sponsor covenant concept
- 9 Establishing the funding requirements of pension schemes
- 10 Effective oversight of pension administration
- 11 Investment governance of defined benefit pension funds
- 12 Hedging investment risk
- 13 Managing longevity risk
- 14 The role of insurance in the occupational pensions market
- 15 Pensions – a corporate perspective
- 16 A note on the investment management of defined contribution schemes
- 17 Effective investment governance in defined contribution schemes
- 18 Inside pension scheme governance
- Index
8 - Employer support and the development of the sponsor covenant concept
Published online by Cambridge University Press: 05 July 2011
- Frontmatter
- Contents
- Figures
- Tables
- Contributors
- Abbreviations
- 1 Introduction
- 2 Regulatory and supervisory context for occupational pension provision
- 3 Pension funds and the capital markets
- 4 Social responsibility and fiduciary duties of trustees
- 5 Good trusteeship
- 6 Conflicts of interest
- 7 The pension scheme in the employment package
- 8 Employer support and the development of the sponsor covenant concept
- 9 Establishing the funding requirements of pension schemes
- 10 Effective oversight of pension administration
- 11 Investment governance of defined benefit pension funds
- 12 Hedging investment risk
- 13 Managing longevity risk
- 14 The role of insurance in the occupational pensions market
- 15 Pensions – a corporate perspective
- 16 A note on the investment management of defined contribution schemes
- 17 Effective investment governance in defined contribution schemes
- 18 Inside pension scheme governance
- Index
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
- Good Governance for Pension Schemes , pp. 119 - 133Publisher: Cambridge University PressPrint publication year: 2011