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Keeping your journey on track by monitoring what matters

While on the road you should be keeping a close eye on your car’s dashboard and GPS unit, making sure your engine runs smoothly and you remain on course. Similarly, between valuations, balanced and timely covenant, investment, and funding-level monitoring is crucial to spot any issues early and respond quickly. This will also help you avoid any surprises at the next valuation.


Determine Monitoring Arrangements

Timely and proportionate monitoring is crucial to effectively managing risk and keeping your journey on track.

  • What metrics will be used to monitor your covenant, investment, and funding position?
  • How should information flow?
  • Does scheme and corporate governance allow for an honest and open assessment of how things are going?

Agree Contingency Plan

A well thought out contingency plan agreed by all parties can help you respond to emerging situations quickly and effectively.

  • What are your scheme’s and sponsor’s risks in different scenarios, and what are their consequences?
  • Set limits and triggers during calm periods.
  • Pre-determine actions to take if there are breaches (e.g. what you will do if you are behind on your journey plan), but remain flexible enough to respond to the unexpected.
  • Adjust your governance as necessary to enable trustee and sponsor to react and respond.

Use The Worry Index

  • As a high-level health check of your scheme’s position.
  • As an impartial measure of scheme-sponsor dynamics.

The Worry Index is a guide and can facilitate conversations between trustees and sponsors outside of valuations.

Visit The Worry Index


Track Key Performance Indicators

Keep an eye on the things that matter most, ensuring these get reviewed thoroughly and do not become a ‘tick box’ exercise:

  • Covenant strength.
  • Investment risk and return.
  • Funding level.
  • Scheme maturity.

Prepare for Unexpected Events

What other indicators are there that might be cause for concern?

  • Is demographic experience in line with assumptions?
  • Where are we in the economic cycle?
  • Are there wider geo-political events that could impact the scheme or sponsor, and lead to significant loss?
  • Are there corporate activities or developments across the sector that cause concern? Are there any expected sponsor events (e.g. contract or debt maturities) to be aware of?
What Next?