The Pensions Regulator (TPR) has committed to assessing how savers transferring into defined benefit (DB) superfunds are protected.

In a blog, TPR said superfunds were an example of the sort of “other types of vehicles” that the market is moving towards, acknowledging that “there could be benefits to this for some schemes”.

“But protecting savers must be at our core, and we expect trustees to think very carefully about whether this is in their members’ best interests,” noted TPR.

The regulator added that it wanted to work with the industry at earlier stages of innovation, in order to “ensure efficient and effective use of resource”.

There are currently two DB superfunds in existence, Clara Pensions and The Pension SuperFund.

TPR established guidance for those setting up and running a superfund in December 2018, but in July 2019 a cross-party ministerial team asked for more time to plan and introduce DB consolidation legislation as it is “a really difficult and technical area”.

In October 2019, the Department for Work and Pensions (DWP) admitted that it had yet to find the “sweet spot” between balancing out the need for member security, employer affordability and investor profitability in order to legislate DB superfunds.

As such, the responsibility of supervising aspiring superfunds has remained under the remit of TPR.

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