Nicola Parish, executive director of Frontline Regulation, says the ongoing economic turbulence in the UK emphasizes the need for trustees and stakeholders to remain vigilant in the face of increasing challenges.
Nicola Parish, executive director of Frontline Regulation, says the ongoing economic turbulence in the UK emphasizes the need for trustees and stakeholders to remain vigilant in the face of increasing challenges.
In a blog post, she underscored the crucial role of robust employers in safeguarding pension savers and urges trustees to have a comprehensive understanding of employers' financial positions and potential future challenges. Particularly during times of economic uncertainty with rising inflation, interest rates, and fuel/energy prices, coupled with a surge in business debt during the pandemic posing risks to the ability of sponsoring employers to support defined benefit pension schemes. This makes close monitoring and appropriate advice essential.
To support trustees dealing with employer stress or distress, the regulatory body has refreshed its guidance, originally published in autumn 2020 to address the impact of COVID-19 on the UK economy. The updated guidance emphasizes the importance of covenant monitoring within an integrated risk management framework and urges trustees to revisit and take appropriate action based on the guidance.
