Sponsor covenant meaning

Clara superfund Clara superfund announced, in a statement, that 730 members of the Church Mission Society Pension Scheme are set to transfer under its stewardship, representing its first transaction with a not-for-profit employer and, overall, the fourth time assets have been transferred to the superfund. Positioned as a novel financial consolidation model, the superfund brings multiple DB schemes together so they can be run at a lower overall cost. Clara noted the agreement is the inaugural application of its ‘connected covenant structure’, enabling an ongoing guarantee from the Church Mission Society as the original sponsor, complemented by capital provided by the superfund. This covenant offers extra, long-term protection for members and bolsters the financial protections in place as the scheme advances towards an insured buy-out, Clara said. The organisation further anticipates that pension schemes with assets of up to £50bn could be interested in enhancing their financial resilience through this route...

TPR described its covenant guidance as the final piece of the jigsaw for its DB funding code. The DB funding code took effect on 12 November 2024. It provides a framework that trustees can apply to calculate and set their long-term funding strategies, in a manner that shifts them away from significant financial dependence on their sponsoring employer overall...

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

THIS PRACTICE NOTE APPLIES TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES Purpose of scheme funding negotiations Funding discussions typically take place between the employers that sponsor pension schemes and the trustees who run them. Trustees and sponsoring employers are generally required to agree the following funding matters: the valuation of a defined benefit (DB) scheme’s assets and liabilities on a scheme‑specific basis (or, more precisely, the methods and assumptions used to determine the scheme’s ‘technical provisions’) the statement of funding principles, being a written explanation of the trustees’ policy for achieving the statutory funding objective if the valuation shows the statutory funding objective was not met at the effective date (that is, the scheme’s assets are less than its liabilities on a scheme‑specific funding basis), the recovery plan the schedule of contributions, which broadly sets out the contributions the employer will be required to pay to the scheme in the future for scheme valuations with an effective date on or after 22...

FORTHCOMING CHANGE : On 1 September 2022, the DLUHC opened a consultation proposing fresh obligations for the LGPS to oversee and publish climate-related risks, including the carbon emissions associated with its investments. As the UK’s largest public sector pension arrangement, the LGPS serves 6.2 million members and holds £342bn of assets worldwide. The government’s plans would require administering authorities to measure their carbon footprint, evaluate how climate change may influence pension assets and liabilities, and provide an annual report on the extent to which holdings align with the 2015 Paris Agreement, the global climate treaty adopted by much of the world. The initiative aims to strengthen the management of climate-related financial risk and to bring the LGPS into line with rules already applied to private pension schemes. The package seeks to give effect to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The consultation closed in November 2022 and a formal response is awaited. For more detail, see News Analysis: Law360. This Practice Note concentrates on...