Pensions Covenant Monitoring

The Local Government Pension Scheme (LGPS) is a national scheme administered on a local basis by Wolverhampton City Council as Administrating Authority of the West Midlands Pension Fund (WMPF) and West Midlands Integrated Transport Authority Pension Fund (WMITA), providing current and future benefits for 280,000 scheme members. Both Funds are referred to as ‘the Fund’ throughout this report.

The Fund has implemented a framework for the monitoring of its participating employers with regards to covenant strength. Whilst this framework constitutes baseline data upon which to assess the high level covenant strength of each employer, there will be instances where more detailed analysis will be required, for instance:

• As an independent review of a specific employer’s covenant strength is required • For “critical cases” whereby the baseline data analysis flags a concern • As a funding strategy/contribution setting aid • To support negotiation with specific employers around the triennial actuarial valuation