Amid the Covid-19 outbreak, it is vital that trustees of pension schemes understand how their scheme sponsors are likely to be impacted so they can take the necessary actions to prevent any disruption to members.
"Trustees should understand the likely impact on sponsors with particular focus to the short-term, and may need to seek professional employer covenant advice."
Day-to-day issues (explored within this insights paper) are most at risk of being overlooked in the current climate. Therefore assessing the financial impact on sponsors and schemes should be at the forefront of trustees’ minds.
While some decisions may seem trivial in the light of the wider sponsor and public concerns, further problems are at risk of occurring if ’normal‘ operations are compromised during this time, so trustees must maintain a complete view of their scheme management.
This note considers some of the issues facing sponsors that are relevant for defined benefit pension schemes and what actions trustees may look to take in response to rapidly changing circumstances.