Pensions Minister, Torsten Bell, has defended the current gateway framework for superfunds amid concerns about its restrictiveness, emphasising that it's 'not a free-for-all'.

Responding to a question from Pensions Age at the Pensions UK Investment Conference 2026, Bell said: “I think that people will always say that [the gateway rules are restrictive for superfunds] and they probably should always be saying that, because there’s a tension in the system and that’s what it’s set up to do - that’s why it’s a gateway, not a free-for-all."

“They should focus on what the actual numbers are," he added.

However, industry experts have warned that the current rules could make superfunds a "niche" option and push more defined benefit (DB) schemes towards buyout, arguing that regulatory changes may be needed to ensure superfunds become a meaningful part of the endgame landscape.

New Capital Consensus parliamentary liason, Francis Bell, said the current moment represented a key turning point for the future deployment of DB capital.

“This is a really important moment because such a huge amount of pension scheme money is at a crossroads between the different endgame strategies,” Francis Bell argued.

“If the regulatory framework isn’t right, there is a risk that all of that money ends up moving into insurance strategies that prioritise ultra-low risk assets, which fail to improve the economy and society that pensioners retire in."

With this in mind, Francis Bell suggested that the proposed gateway tests governing entry into superfunds could inadvertently limit their role in the DB landscape.

“There is a risk that the gateway rules make superfunds such a niche part of the market that they are only used as a bridge to insurance buyout,” he warned.

“The pensions reforms are broadly very positive, but unless the regulatory package is right, it won’t move the dial.

“If the regulation doesn’t work as intended, it will simply lead to more schemes defaulting to insurance buyout.”

Echoing this, New Capital Consensus chair and founding director, Ashok Gupta, noted that the investment approach adopted by schemes would differ significantly depending on the chosen endgame strategy.

“If we were to shift towards self-sufficiency and consolidating into superfunds, then we have far more potential for assets to be allocated to productive investments,” Gupta suggested.

He explained that schemes operating on a long-term self-sufficiency basis would typically maintain greater exposure to return-seeking assets.

“If you have a large pension scheme operating on a self-sufficiency basis, or a superfund on a self-sufficiency basis, then those pension funds would invest in a range of risk-bearing assets such as infrastructure, illiquid alternatives and other return-seeking assets,” he continued.

“Those are exactly the types of investments the government wants to see - infrastructure, business investment and other long-term assets that can support economic growth.”

However, Gupta warned that regulatory design would play a decisive role in determining how superfunds invested.

“If superfunds are regulated like insurance companies, then they will end up with a similar asset mix,” he said.

“If they are regulated like pension schemes operating on a self-sufficiency target, then there is no reason why they should have the same asset allocation as an insurer.”

Gupta also suggested that broadening participation in the superfund market could support a more balanced endgame environment.

“The way the gateway has been framed needs to be reconsidered if superfunds are going to become a significant part of the DB endgame landscape,” he added.

“Allowing insurers to establish superfunds could help create a more balanced market between buyout and consolidation.”

Gupta highlighted that current models already demonstrated different approaches within the emerging superfund market.

“Some superfunds act effectively as a bridge to buyout, enabling schemes to exit earlier by warehousing them until they are ready for buyout,” he explained.

“But the original intention was to consolidate schemes where the goal was long-term self-sufficiency, rather than simply preparing them for insurance buyout.”

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