The potential human impact is awful. First and foremost, our hope is that the spread of the virus will subside, and disruption will be minimised as far as possible. However, the recent spread of the coronavirus, particularly the increasing number of cases outside of China, means it is inevitable that this will materially impact the rate of global economic growth in 2020 and potentially beyond. The timing and shape of any rebound will depend on how quickly cases begin to peak, the containment measures deployed to slow the spread of the virus and the effectiveness of policy responses by governments and how quickly public sentiment is restored. We’ve seen how uncertainty and fear have caused significant market fluctuations over the last few days and weeks.

Against this backdrop, here are 5 key actions that trustees and sponsors should be taking now:

• Understand the impact on scheme funding and agree a response to any material deterioration
• Review sponsor covenant for adverse changes – impact will be different for every business
• Consider whether your investment strategy remains suitable, including managing the timing of any planned changes, triggers and ongoing liquidity
• Review business continuity plans and manage implications for ongoing administration
• Have a strategy for communicating with members and consider impact on options such as transfer values

With all this uncertainty we predict trustees and sponsors will find managing this a key challenge in the coming weeks. Taking time to understand the potential implications for your scheme using the checklist above is a good first step towards building this into your plans.

Read our full publication here

Please contact your usual Hymans Robertson consultant if you would like any further information or to discuss next steps.