Trustees are being urged to take much greater responsibility for the review of their sponsor covenant in order to save on adviser costs, Atkin & Co has advised.

Often trustees will rely on an adviser completing the basic covenant review for them but a substantial cost can be attached to this process. Atkin & Co has therefore stated that more trustees should be able to analyse the strength of the covenant themselves.

The company’s managing director Chris Atkin said: “Reviewing the strength of the sponsor covenant themselves provides the opportunity for the trustees to improve their own understanding of the future funding possibilities, as well as any potentially important factors that may affect the covenant in future.

“The experience of this work may enhance the trustees’ knowledge of their scheme’s situation, rather than simply reading an adviser’s report.”

Atkin & Co did comment however that after the initial review, trustees should bring on board a covenant specialist to take forward any issues they may have.

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