Superfund assessment to be completed ‘by the end of the year’ - TPR

The Pensions Regulator (TPR) has said that it hopes to have completed its assessment of the two emerging superfunds “by the end of the year”.

It follows the news that defined benefit consolidation will not feature in the upcoming Pensions Bill, meaning that the regulator will be required to supervise aspiring superfunds, as well as review employer applications for clearance into the superfunds, for longer than first anticipated.

Clara Pensions and the Pension SuperFund are both currently engaging with the regulator as it assesses their applications, while the later has already submitted its first deal for clearance with others “exclusively looking to submit soon”.

A TPR spokesperson said: “We believe DB superfunds are potentially a force for good and can provide a secure and safe place for pension saving and help drive up standards.

“We are working hard to assess the two emerging superfunds and will have completed this by the end of the year. We will then review any application from an employer for clearance to transfer into a scheme. We would expect all proposals to have the full support of the scheme trustees and provide better outcomes for members.

“Superfunds will need to seek our authorisation in due course once legislation has come into effect.”

It follows comments from Shadow Pensions Minister, Jack Dromey, yesterday (4 July), that DB consolidation will not be in the upcoming Pensions Bill, while the Department for Work and Pensions said it would need “a bit more time” introduce legislation.

The regulator has been supportive of consolidation where pension schemes might not be “well governed, run by fit and proper people and are backed by adequate capital”.

Commenting on whether the regulator may favour one particular model over the other, TPR director or regulatory policy, David Fairs, told Pensions Age: “We look at these events and we don’t favour any particular model.

“What we do is each look at each model in it’s own right, we do want to see that superfunds are run by fit and proper people and that they have the right systems and processes in place and that they are financially sustainable with strong financial backing.”

Commenting, The Pension SuperFund managing director, Antony Barker, said: “As this first transaction will bring the Pension SuperFund into existence and able to accept transfers from other occupational pension schemes, then it is inevitable that a detailed and time consuming scrutiny will be applied covering both the proposed transaction and the future operations of the SuperFund and its third party service providers.

“We welcome the regulator’s comments this week supporting the general case for consolidation and the importance of raising governance standards. We understand that DWP and Treasury are formalising arrangements to develop a mutually acceptable oversight regime.

“Even though consolidation does not appear to feature in the expected Pensions Bill, it is good to see a commitment from the regulator to still advance transactions that will greatly improve the likelihood of 1000s of members getting their benefits paid in full."

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