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Covenant Services

Willis Towers Watson has, in its background, core competencies in complex corporate restructurings and the provision of advisory services to large creditors and corporates. Our clients range from small, single-employer schemes to complex multi-employer schemes.

We see clear evidence that Irish pension scheme trustees are paying more attention to covenant quality than ever before. Best practice now leads to an expectation that covenant will be considered when trustees are considering funding and investment strategies, or whenever assessing the possible impact of corporate activity.

We provide proportionate and balanced analysis, with clear opinions and recommendations on all aspects of an employer’s financial affairs, including their business model as well as short- and medium-term outlook and their legal obligations to the scheme. We provide a clear steer on the level of contributions that might be considered appropriate in the context of the scheme and the security provided by the sponsor’s support.

We can support you in a number of areas, including:

  • Setting out the strengths and vulnerabilities of the employer covenant as well as providing specific suggestions on how to work collaboratively to mitigate risks and to overcome any reporting obstacles.
  • Supporting you in your own covenant assessment process.
  • Evaluating the sponsor’s ability to fund a scheme appropriately in ‘business-as-usual’ and stress conditions, including considering the scheme’s impact on the sponsor.
  • Designing and delivering covenant solutions in normal and distressed situations.
  • Advising on contingent assets and other covenant strengthening mechanisms.
  • Assessing the impact of scheme restructuring and corporate transactions as well as advising on mitigation options where appropriate.
  • Facilitating constructive and collaborative dialogue between you and the employer.
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