Overview

It is now a year since the last statement - on scheme funding, employer covenant and the approach trustees should take during the economic downturn - was issued by the regulator. This week it issued a further statement looking at how trustees should address covenant assessment on an ongoing basis. The regulator also uses the statement to announce new regulatory guidance, which it will be consulting on in due course.

The statement was aimed at ensuring trustees continue to focus on the proper consideration of the employer covenant in setting prudent funding targets and appropriate recovery plans. The regulator comments in its 2010 statement that it has had good feedback on its June 2009 statement and has had requests for further guidance in relation to covenant assessment.

Like the regulator's statements in 2008 and 2009, the June 2010 statement is high level. However, it is a useful indication as to what we can expect the more detailed draft guidance to be published this summer will cover.

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