The AI-based technology will use Cardano’s database of historical covenant assessments to provide automated assessments and reports for schemes to analyse their covenant strength.
The tool has been launched to assist schemes where high-level covenant analysis may be more appropriate, including schemes with assets less than £50m and simple covenant structures.
Discover – which will allow Cardano to enhance its covenant services for schemes of all sizes – can also conduct AI led reviews of the underlying employers of sectionalised or non-associated multi-employer schemes including Local Government Pension Schemes.
Cardano Advisory director Felix Mantz said: “Discover is a further step towards modernisation within the pensions industry, as we continue to harness new technology to build tools and solutions for schemes. With our wealth of data, we can increasingly harness this through AI to bring innovative risk management solutions to trustees, employers, and members in a cost-effective manner.
“Traditional covenant reviews involve in-depth analysis from a team of dedicated covenant professionals and can be out of reach for smaller schemes due to costs. Given the importance of covenant to member outcomes, and with an increased focus from The Pensions Regulator on covenant, we believe that Discover will make external covenant analysis more accessible and affordable to smaller, simple, or sectionalised schemes.”
