Partner Anna Rogers comments on the Pensions Regulator signing off on first ‘superfund’
Clara-Pensions has become the first defined benefit (DB) superfund to complete The Pensions Regulator’s assessment process.
The industry has described The Pensions Regulator’s (TPR) approval of the Clara-Pensions defined benefit (DB) superfund as a “significant milestone” and a “landmark day” for DB schemes in the UK.
Anna Rogers said she was “pleased” to see the announcement, which should lead to more choice for some DB schemes, but stressed that member protection is paramount.
“Trustees will be the ones who make the decision whether to move to a superfund. It may not be an easy call, but trustees might find the segregated structure of the Clara model appealing. It’s designed to reduce the element of cross-subsidy between the schemes that have come in.
“Perhaps we’ll see the first transfers happening soon now, but it will take a while before it’s a well-trodden path. The legal process will be similar to bulk annuity purchase in many ways. It won’t be an ‘all-risks’ transfer so it’s important for the trustees to make sure that there’s no leakage of members’ rights.
“A consolidator is only going to provide the specific benefits that have been bought. That means trustees will want to think about benefit specifications, contracts, residual risk and employer indemnities in the same way as for a buyout.”
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