UK - Aon Consulting has launched a service whereby pension fund trustees can more easily assess the covenant of the sponsoring employer.
Aon aims to give an independent assessment for trustees, while trying to help them understand the financial elements of the assessment and give advice on which steps to take following an analysis.
Under the new funding regime introduced in 2004, trustees have to undertake a comprehensive and ongoing assessment of the financial strength of the employer or the employer's covenant.
The Pensions Regulator (tPR) warned pension scheme trustees last year they must scrutinise more closely employer covenant changes, particularly in cases of corporate transactions such as buyouts.
The regulator wants trustees to look carefully at changes to the employer's ability to fund the pension scheme: "Where there are highly leveraged bids, trustees should look closely at how the pension scheme is going to be affected," a spokeswoman told IPE last May.
However, In recent month there has been criticism suggesting trustees do not challenge the information they are given by the sponsoring company often enough. (See earlier IPE story: Trustees 'lack objectivity' in judging sponsors)
Aon has appointed Anthony Light to head the new service. Light joined at the end of last year from Ford Retail, where he was a European financial controller.
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