Services for trustees and sponsors

The UK’s leading specialist provider of covenant advice

In a challenging and volatile market, the strength of the sponsoring employer has never been more important. Lincoln Pensions offers a full range of covenant advisory services, from monitoring and event-driven advice to counterparty credit assessments.

How can we help?

Insightful covenant advice is pivotal to the management and resolution of complex pension issues.

Lincoln Pensions can provide clear answers to complex questions like:

  • How strong is my covenant?
  • How does it compare to one quarter, one year, three years ago?
  • How does this event impact my covenant? What contribution would address any deterioration?
  • How does a contingent asset or guarantee improve my covenant?
  • What value of guarantee, from whom, and on what terms would move my covenant up your scale?
  • How much can the company afford? Are we constraining sustainable growth?
  • Can the company support the investment risk being run-on the scheme?
  • The insurer with the cheapest buy-in quote – are they weaker than the insurer which is most expensive? Am I trading price vs. security?

Employer covenant assessment and monitoring

Our detailed rating scale provides a clear method to benchmark your covenant strength over time. We can provide where required granular advice on changes to the employer covenant resulting from internal and external corporate events.


We provide clarity on ‘what level of deficit recovery contributions’ can reasonably be afforded and can stress test the operations along with the pensions scheme to provide clear advice.  We ensure our advice meets TPR guidance and its new statutory objective regarding sustainable growth.

Event-driven advice

External and/or internal corporate events can have a significant impact on covenant strength. We provide a clear assessment of the covenant strength impact of corporate events, including  acquisitions, divestitures, corporate restructurings and public takeovers. We also advise on  stressed/distressed situations’ impact on covenant strength where there is a material risk of a PPF event.

Scheme funding advice

We provide advice and support negotiations between trustees and sponsors in connection with the triennial valuation process. This is typically done in parallel with your scheme actuary and can include developing a structured recovery plan (based on affordability and covenant strength) and the design of an integrated risk management framework. Our experience of working at The Pensions Regulator (TPR) has given us great insight and strength in this area.

Regulatory intervention cases

We have more experience of current FSD and CN cases than any other covenant advisor in the market place. We act as expert witnesses on covenant and related matters to parties (including TPR) on regulatory intervention cases.  We also generally advise on potential “moral hazard” situations.

Counterparty risk assessment

The exchange of all of part of the corporate covenant exposure may not always improve member security and therefore requires careful analysis. Lincoln Pensions is one of the most active independent counterparty risk analysts advising on the credit strength of financial counterparties. We provide clear advice on counterparty risk and do not sit on the fence.

Integrated risk management

Trustees and sponsors have traditionally considered the three important areas of covenant, investment risk and funding separately with limited interaction between the three disciplines.  We can help design an integrated risk management framework that brings together these critical aspects of pension scheme risk.


We can provide training to Trustees and Sponsors on topics such as covenants, assessing affordability and integrated risk.  Some clients are well-equipped to conduct proportionate covenant monitoring ‘in-house’ and value additive training to assist them in enriching their processes.

Defined Contribution Advice

Much of the skill and experience that underpins our work with DB schemes and sponsors, is relevant to the DC arena too. From helping to broker a constructive and informed trustee/employer dialogue to ensuring key counterparty risks are considered and addressed, we will work collaboratively with you and your advisers to achieve the right result.

Call: +44 (0)20 3889 6300 or email us