United Kingdom

Aon Employer Covenant Consulting Services

All scheme sponsors / employers have a legal obligation to provide financial ability to support their defined benefit (DB) scheme now and in the future. Covenant strength is exposed to a number of factors such as corporate restructures, mergers and acquisitions, and economic / market fluctuations. Therefore, every UK defined benefit pension scheme needs to understand the current strength of the employer covenant and how it could change in the future. Furthermore, assessing and regular monitoring of the covenant allows schemes to decide the appropriate level of risk when setting investment strategy, funding target and, where necessary, recovery plans.

How we can help

We are a leading provider of covenant advice to pension trustees and corporate sponsors, providing advice on schemes of all sizes and across all business sectors.

Our Covenant specialists also help trustees develop contingency plans, enabling them to take action if you need to mitigate against adverse events, such as the risk of employer insolvency, or to improve the security of the scheme.

We also work with corporates to help them understand the impact of corporate activity on the covenant, and implications of pensions legislative and regulatory requirements for their pension risks.

Our employer covenant team is staffed with corporate finance, accounting, credit analysis and actuarial specialists, and we work closely with our actuarial and investment colleagues to provide holistic pensions advice and solutions to our clients.

Covenant capabilities:

We provide the following services to trustee and corporate clients:

  • Covenant assessments and monitoring
  • Advice in relation to covenant visibility and longevity (in line with the Pensions Regulator’s new DB Funding Code of Practice)
  • Integrated risk management and journey planning support
  • Covenant advice in relation to corporate events (including mergers & acquisition, restructuring and special dividends), including on the Pension Schemes Act 2021
  • Support with regulatory interventions
  • Covenant advice on insurer counterparty strength (buy-ins and buyouts) and alternative end game solutions
  • Bespoke covenant advice to LGPS funds, including funding consolidations and Deferred Debt Arrangements
  • PPF guarantor certification analysis

What differentiates us from other covenant providers?

We believe that our dedicated covenant team is different from those of other firms in that:

  • We focus on outstanding client service and providing clear and succinct advice
  • We offer a pragmatic service at a reasonable price; we are happy to tailor our approach to suit our clients needs and budgets
  • Our lead consultants stay involved at all stages of analysis and delivery
  • We work closely with all stakeholders to ensure our clients receive integrated and actionable advice
  • We manage our client relationships carefully to avoid "surprises" and to ensure that trustees can easily incorporate our advice into their overall objectives/requirements

Our approach to Covenant Assessment:

  • Our approach to covenant assessment is closely aligned to that of the Pensions Regulator
  • Covenant visibility and longevity are at the heart of our advice rather than just ratings or restructuring analysis
  • We believe that covenant is strongly influenced by industry dynamics and the position of the employers within that industry - we first understand the industry in which the employers operate before considering the specifics of the employer's business

If you would like to find out more or discuss further, please contact:

Alex Beecraft
Partner and Head of Covenant
+44 20 7086 9230
[email protected]


Aon Solutions UK Limited - a company registered in England and Wales under registration number 4396810 with its registered office at The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN.