Pension Superfund in ‘well established’ talks with a dozen schemes

The Pensions Superfund is conducting a dozen “well established” conversations with pensions schemes over the possibility of moving into the consolidation vehicle, its new CEO has said.

Speaking at the Society of Pension Professionals annual conference last Friday, 21 September, new Pensions Superfund chief Luke Webster added that it was in contact with a “smaller number” of schemes who were “much further along the line” towards consolidation.

Earlier this month, Webster took over from previous CEO Alan Rubenstein who left the consolidator along with its main financial backer, Warburg Pincus, just six months after it was launched.

Giving an update on the number of schemes interested, Webster said: “We probably have around a dozen well-developed conversations at the moment and a smaller number much further along the line and probably 20 to 30 who we have made material contact with.

“We have had feedback from consultants we are working with who are having conversations with their clients that are passing through the level of initial interest. So I am very pleased that it is growing.”

Furthermore, he estimated that there is roughly £200bn to £250bn of liabilities suitable for the Pension Superfund model as of today, growing to around £500bn by 2023.

Also speaking on the panel, Aon senior partner Kevin Wesbroom added: “I think the market demand is there, on the one level you could say ‘is a superfund one way to settle pensions obligations at a price lower than insurance company buy out?’ I would say there is very strong evidence of market demand for that.”

It is thought that the Pension Superfund would be able to work in the current legislative framework, however, Webster added that additional regulation, such as an authorisation regime, was needed to “keep this sector within the balance”.

Webster added: “It is something that doesn’t stop us starting today, but obviously we have to be mindful of what that might look like, and work very closely with the relevant regulator and government to make sure we’re not doing anything to conflict with the eventual shape of regulation. That said, it does work today, but it’s to a limited set of schemes.”

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