We support more than 90 pension clients – acting as lead advisers in high-profile pension restructurings and implementing ground-breaking solutions to complex scheme-funding problems

You can access ongoing and situational support in six key areas, but our advice is flexible and can be tailored to any requirements.

  • Business-specific expertise
  • Highly-collaborative approach
  • Experienced national team
  • Business-specific expertise
    Business-specific expertise
    Sector and situational-specific advice is critical in assessing sponsor longevity and adds value to all our clients
  • Highly-collaborative approach
    Purple icon depicting a handshake
    A genuine partnership with our clients and their other advisers – constructive engagement achieves the best outcomes
  • Experienced national team
    icon depicting a team of people
    Our team of eight full-time covenant advisers have 80+ years combined experience and can support clients anywhere in the UK
Employer-covenant assessment and monitoring

Proportionate, award-winning employer covenant and affordability advice for Trustees and sponsors in relation to actuarial valuations.

Tailored support to monitor sponsor-covenant strength between valuations.

Assessing corporate events

Transactional covenant experience; ranging from mid-market M&A deals to global strategic disposals, major multi-creditor restructurings, insolvencies, and complex group reorganisations.

Developing and implementing integrated risk-management solutions

Formulation of IRM frameworks that highlight material covenant risks; modelling the interaction of these with funding and investment risks.

Clear contingency measures to address specific risks

Liability management and risk reduction

Advice on sponsor-options for employers to reduce DB-pensions liabilities and attached risks.

Journey and end-game planning

Methodical, proportionate, and cost-effective advice on a range of strategic 'endgame' options:

  • commercial consolidators
  • capital-backed journey-plans
  • insurance-based structures; master trust arrangements

Support on the planning and implantation of your selected strategy. 

Counterparty assessment

Higher bond yields have significantly improved the funding positions of many DB schemes, prompting a surge in schemes approaching the insurer market to secure member benefits.

We can independently assess the proposed insurer and any associated risks. 

Other services

Specialist support in contentious matters and litigation (including the use of Pensions Regulatory powers):

  • Contingent Asset Certification for PPF levy purposes,  eg, guarantor strength reports
  • Pension Protection Fund entry
  • Contingent asset-support mechanisms, including asset-backed funding arrangements
  • Access to other teams across our firm, including internal and external audit; strategic risk consulting; ESG consulting; cyber security; asset-valuation and employee benefit consulting   
Luke Hartley
Get in touch
Head of Pensions Advisory Services
Luke Hartley
Contact Luke Hartley Learn more about Luke Hartley
Luke Hartley
Contact Luke Hartley Learn more about Luke Hartley
Luke Hartley
Head of Pensions Advisory Services
Luke Hartley
+44 (0)20 7865 2993

Awards

  • Winner: Pensions Age Awards 2022 Sponsor Covenant Provider of the Year 
  • Winner: Professional Pensions UK Pensions Awards 2021 Sponsor Covenant / IRM Adviser of the Year
  • Shortlisted: Professional Pensions UK Pensions Awards 2022 Sponsor Covenant / IRM Adviser of the Year
  • Shortlisted: Professional Pensions UK Pensions Awards 2023 Sponsor Covenant/IRM Adviser of the Year
  • Shortlisted: Professional Pensions UK Pensions Awards 2024 Sponsor Covenant/IRM Adviser of the Year
  • Shortlisted: Pensions Age Awards 2024 Sponsor Covenant Provider of the Year    

 

Revising recovery plans to achieve funding targets

Challenge
A UK infrastructure and construction services group with multiple DB-schemes needed a revised recovery plan.
Solution
We created a new plan, supported by a contingent-asset structure, with lower initial funding requirements that secured an equity injection and group-wide debt reduction.
Result
All schemes are projected to achieve long-term funding targets, with some reporting a surplus, and reduce repair contributions - and release the contingent asset support.

Reorganising a group scheme

Challenge
As a group’s scheme approached full-funding, it needed to repair material alterations to its underlying covenant caused by extensive corporate activity.
Solution
Apportionment arrangements and appropriate mitigation dealt with the covenant change to a single UK employer, while a dividend policy addresses potential future covenant leakage.
Result
The scheme, now managed by a well-funded UK statutory employer, now has a long-term surplus and expects to be fully funded on a buy-out basis within five years.

Overseas insolvency, Scheme assets: >£1bn

Challenge
The Trustees of a scheme needed support after the employer’s US-parent company, which had provided a guarantee for the UK plan, filed for Chapter 11 bankruptcy protection.
Solution
We guided the scheme through an opportunity to acquire two of the group's businesses as consideration for releasing its claim against both the parent-company and the employer.
Result
The Trustees reached an agreement with the group and representatives of The Pensions Regulator and Pension Protection Fund were kept informed throughout the process.

Protecting a covenant during a business separation

Challenge
A group wanted to navigate the adverse implications for its sponsor covenant of spinning out a profitable part of its business independently of legacy loss-making operations
Solution
We devised a structure for the separation of the businesses to go ahead with the schemes taking an equity stake in the spun-out company.
Result
The structure provided the required support to the schemes and we supported the Trustees in their liaison with The Pensions Regulator.

Testimonials

“Their advice was focused, proportionate and collaborative with our other advisers, helping us steer a delicate situation towards an appropriate outcome.”

Client name Chair of Trustees

“[The Grant Thornton report] was excellent. By far the best covenant report we have received...”

Trustee large scheme utilising multiple covenant advisers

Proportionate approach to complex negotiations, Scheme assets: c.£10m

Challenge
The Group required investment to facilitate growth and had progressed several restructuring plans, seeking to develop different parts of its business.
Solution
We took a proportionate approach to reviewing various business plans, focusing on critiquing the analysis and proposals prepared for Management by their own advisors on behalf of the Trustee
Results
We supported the Trustee in considering the possible outcome to the Schemes under various downside scenarios, including RAA/CVA, an accelerated disposal and a liquidation.

UK insolvency, Scheme assets: >c.£1bn

Challenge
The Group’s trading results declined leading to an increase in its debt position and the Group subsequently announced that it was considering the sale of one of its divisions.
Solution
We supported the Trustees in discussions with TPR, the Group and other stakeholders regarding the potential impact on the Schemes of the proposed restructuring and sale.
Result
The Group was not able to obtain the support of its lenders nor its shareholders for the proposed restructuring and entered liquidation, with the Schemes entering PPF assessment.

Complex stakeholder discussions, Scheme assets: c.£400m

Challenge
There was a long-term decline in the revenue from the Group’s historical business, which was not sustainable in the longer term unless it could be replaced by alternative revenue.
Solution
We supported the Trustees in reviewing the Group’s strategic and refinancing proposals, which initially would have resulted in a materially detrimental impact on the Scheme.
Result
We helped the Trustees negotiate a package of mitigation which included a share of the global security together with a deficit recovery package that covered PPF drift and a contingent contribution agreement linked to upside.

Sponsor refinancing, Scheme assets: c.£400m

Challenge
The Group was faced with refinancing its borrowing facilities ahead of upcoming maturities, with lenders seeking increased security over the assets of the Group.
Solution
We supported the Trustees in understanding the potential impact of the proposed refinancing, including how it could affect any return to the Scheme in the event of insolvency.
Result
The Trustees agreed a package whereby the Scheme ranked pari passu with lenders’ new security relating to the increase in borrowing, with the Scheme’s existing security unaffected.

Proportionate covenant advice, Scheme assets: c.£50m

Challenge
The Trustee had not previously taken covenant advice and was looking for a proportionate covenant assessment relative to the size of the Employer and wider Group.
Solution
We provided the Trustee with two reporting approaches – a concise covenant report or a short form covenant summary – consistent with its requirements.
Result
The Trustee opted for the short form covenant summary comprising the key findings of our covenant assessment, supplemented with conclusions and recommendations.

Get in touch with our experts:

Luke Hartley
Luke Hartley
Head of Pensions Advisory Services
London
View full profile
Phil Green
Phil Green
Director
London
View full profile
Zoe O’Donnell
Zoe O’Donnell
Associate Director
London
View full profile
Neil Knights
Neil Knights
Partner, Head of Pensions
London
View full profile

    Get the latest pensions trends, insights, commentary and events, straight to your inbox.

    Read our insights

    View more
    Contingent assets supporting DB pension schemes: panacea or empty promise?
    Article Contingent assets supporting DB pension schemes: panacea or empty promise?
    Understanding the values and pitfalls of contingent assets supporting DB pension schemes.
    Luke Hartley
    Luke Hartley
    | 2 min read | 19 Oct 2023
    image depicting a woman analysing documents
    Guide Understanding DB pension scheme restructurings
    A guide to the approach of lenders and DB pension trustees in stressed multi-creditor refinancings and restructurings
    1 min read | 30 Jun 2023
    Six months of choppy waters in DB pensions
    Article Six months of choppy waters in DB pensions
    What are the key trends for pension schemes to be aware of as we move into the second half of the year?
    29 Jul 2022
      View more