Defined benefit (DB) pension schemes must stay alive to heightening risks to funding from sponsor covenants, climate change and longevity experience, The Pensions Regulator (TPR) says.
Schemes need to dynamically and closely monitor the position of their employer covenant and its corporate longevity, ensuring the assessment is not conducted in isolation, the Employer Covenant Practitioners Association (ECPA) says.
Sponsor covenants are facing a “triple whammy” moving into 2021 as the effects of Covid-19, Brexit and macro-economic conditions combine, Lincoln Pensions warns.
Defined benefit (DB) scheme members with weaker employers face a 50% chance of a cut in benefits due to sponsor insolvency, according to Hymans Robertson.
Caroline Escott says there should be alignment between the various policy and regulatory initiatives on value for money to avoid overburdening trustees.