Covenant assessment, covenant monitoring and scenario planning
The majority of our client schemes require a detailed review of covenant support (reflecting the Pension Regulator’s most recent guidance) which is importantly independent, both as a check on sponsor provided information and, from a governance standpoint, independent of scheme actuarial and investment consultancy as part of their triennial valuation processes. This is generally supplemented by covenant monitoring between valuations proportionate to the level of risk exposure and how much change is anticipated. The particular scheme context will often determine the emphasis of covenant assessment and reporting and our approach is that “no one size fits all”.
Gazelle has considerable experience of ensuring that covenant support is then appropriately and consistently reflected in funding and investment strategy. We place particular emphasis in ensuring that our clients review covenant, funding and investment strategy together as part of an integrated risk approach.
We encourage our clients not just to engage in regular covenant monitoring but also to set aside specific time at trustee meetings for scenario planning where key economic, investment and sponsor contingencies are focused on.
For many of our clients corporate or scheme transactions can occur regularly and require particular attention to ensure that the security of member benefits is protected. Gazelle has extensive experience of all types of M&A and corporate restructuring transactions as well as a specialisation in scheme transactions: apportionments, scheme mergers and sectionalisations.
We have extensive experience of designing and negotiating appropriate mitigation for the specific scheme and context. Solutions range from guarantee structures, security and contingent funding triggers through to complicated contingent security arrangements. Gazelle’s advice on solutions is not tainted by the provision or cross-selling of any tax, credit or insurance-based services or structures on which solutions may rely.