about the pension superfund

The Government has challenged UK businesses to find a way to keep the promise they made to the 11 million Members of Defined Benefit pension schemes, many of which are under-funded. We’ve responded.

  • The UK’s first pension consolidating ‘superfund’
  • Led by a highly experienced team
  • An alternative, affordable solution for employers
  • With strong protection for Members
  • And committed to freeing up UK businesses to grow

how the pension superfund works

As the UK’s first consolidating pension ‘superfund’, we accept bulk transfers from existing Defined Benefits pension schemes and pool them together to create one, large occupational pension scheme.

That offers advantages of scale so we can achieve higher returns with lower costs, greater stability and less risk; great news for employers, Members and trustees.

No change is required to Members’ existing benefits, while the design of the business model means commercial rewards only come when Members benefit too.  Our investors’, Members’, trustees’ and clients’ interests are aligned. 

PENSIONS
The Pension SuperFund

This, underpinned by capital

provided by our investors, adds up to

Efficiency

Reliability

Affordability

Opportunities

Who are we?

Understand better how the pension super fund works for you

Click above to review specific detail

Advisor

We have written to the chairs of trustees of over 300 DB schemes and sponsors highlighting the opportunity to enhance the security of their scheme through the Pension SuperFund. They, in turn, will no doubt be turning to you as their trusted advisors asking you to explain what superfunds are and how they work, so we wanted to update you too.

  • The Pension Superfund consolidates UK occupational defined benefit pension funds by accepting TPR cleared bulk transfers of all pension assets and their various contractual liabilities into an existing HMRC registered and PPF eligible arrangement topped up, as necessary, with a final tax- deductible sponsor contribution to satisfy our conservative “self-sufficiency” funding basis. That sponsor contribution can be in the form of what might otherwise be deemed employer-related investments as there is no link post transfer. As we novate all existing asset management and administration arrangements, not only is our transfer price more affordable than buyout, the transition costs are much lower too
  • The covenant which the operating sponsor currently provides to the scheme, and its obligation to make future contributions to it, ends and is replaced by an asset-backed covenant supported by third-party investors known as the capital buffer fund.
  • The scheme trustees hand over their responsibilities to our independent, professional trustee board. In doing so they will be fulfilling their fiduciary duties by improving the scheme’s funding level and financial covenant to secure members’ benefits. This transfer also enhances the governance of the scheme.
  • The Pension SuperFund generates the economies of scale by merging a ceding scheme’s assets and liabilities alongside those of other schemes which have entered the SuperFund. Ceding scheme members become our SuperFund members and we pay their agreed contractual benefits in full in perpetuity.
  • Uniquely among consolidators, insurers and other pension arrangements, The Pension SuperFund may share any surplus capital with members by way of a periodic defined contribution bonuses (or taxable cash payments if allowances have been reached).
  • We expect that the increasingly onerous governance demands being placed on DB scheme trustees, and the uncertainty around any sponsor’s ability to make future contributions, make the prospect of moving to The Pension SuperFund highly attractive.
  • As well as bulk transfers, our model enables us to consider scheme rescue and PPF+ cases using Flexible Apportionment Arrangements and transfers with member consent mechanisms. We can also consider partial transfers if a sponsor simply wants to reduce rather than remove its exposure.

The Pension Regulator makes it a responsibility of the employer to let them know that you are considering a transfer into a SuperFund. We can help you with that in due course, but as a first step.

Trustee

Sponsors are suffering unprecedented levels of financial stress. The Pension Regulator has now put in place a framework under which we can begin inviting trustees, such as yourselves, to consider the consolidation of your defined benefit pension scheme into the Pension SuperFund.

How does it work for you?

  • The Pension Superfund consolidates UK occupational defined benefit pension funds by accepting bulk transfers of all pension assets and liabilities into an existing HMRC registered and PPF eligible arrangement topped up, if necessary, with a final sponsor contribution.
  • On transfer to the Pension SuperFund, your fund’s sponsor covenant (and all the uncertainty around your sponsor’s ability to make further contributions to the scheme in the future) is removed and replaced by a cash covenant contributed by third party investors; this is known as the buffer fund.
  • You, as a trustee, can then transfer your responsibilities to our world class, independent, professional Trustee board. By doing so you will be fulfilling your fiduciary duties by improving your scheme’s funding and financial covenant to secure members’ benefits. Your and your sponsor’s responsibilities end there.
  • The Pension SuperFund then generates the economies of scale by running your fund’s assets and liabilities together with those of other funds which have entered the SuperFund. Your members become Pension SuperFund members and we pay their agreed contractual benefits in full, in perpetuity.
  • Uniquely, The Pension SuperFund may share any outperformance in asset management with scheme members by way of a periodic bonus on top of their existing benefits.

Talk to us about your pension scheme and how it could benefit from a more secure future in The Pension SuperFund.

For further information please contact us.

For any media enquiries please contact our press office:

The Pension SuperFund Press Office