On the go: Employer covenant risk is defined benefit pension schemes’ greatest worry, according to a poll of 42 trustees and their advisers by professional trustee company PTL.
PTL’s DB Risk Survey asked respondents to indicate the top three risks facing DB pension schemes. It found that 26.09 per cent of trustees and their advisers rate covenant as the biggest risk. This figure has jumped from July 2017 when only 13.87 per cent rated it their top worry.
Brexit came second, with 16.67 per cent citing it among their top three risks.
Cyber security, new deficit funding rules, guaranteed minimum pension equalisation and change of government all ranked equal third – at 8.7 per cent – in the list of trustees’ concerns in the latest poll.
General Data Protection Regulation compliance ranked at a minuscule 0.72 per cent of respondents’ concerns and caused them least worry, hardly registering on the scales.
Richard Butcher, managing director at PTL, said: “In June 2017, one year after the European Referendum, concerns about employer covenant risk were at around 14 per cent, but fast-forward to the start of this year with an exit from the EU on the horizon but no deal agreed, and that figure has risen to 26 per cent. While direct concerns about Brexit and government are not rising significantly, the things that they impact are."
He added: "It’s clear that the unclarified terms of Brexit are causing an ever-increasing circle of uncertainty over everything in its path.”
