New route for employers to offload retirement plans as UK’s first pension ‘superfund’ deal gets approved
The UK’s first commercial pension “superfund” deal was cleared by the UK Pensions Regulator on Monday, opening a new route for employers to offload their retirement plans.
The agreement will see Clara Pensions take over the £590 million Sears Retail Pension Scheme, assuming the responsibility for its assets and liabilities at the end of this month. Clara will also provide £30 million of new capital to the plan.
The scheme covers the retirement promises of nearly 10,000 members who worked for former Sears Group brands such as Miss Selfridge, Wallis and Warehouse.
The deal is the first of its kind in the UK and comes six years after Clara was set up.
Clara remains the only superfund to have been provisionally cleared by the Pensions Regulator after rival Pension Superfund failed to achieve regulatory approval for the third time back in September.
Commenting on the deal, Minister for Pensions Laura Trott said: “We welcome the transfer, the first of its kind in the emerging Superfund market, the expansion of which forms part of our longer-term plan for pensions. I am confident the market will continue to grow, freeing up employers to focus on their core business, and assisting the Government’s push for increased productive investment within the pensions sector.”
Clara Chief Executive Simon True said it was a “landmark day” with the company now “firmly on the road” to making defined benefit pensions safer and more secure.
“Insurance remains the gold standard for any pension scheme member, but not all schemes can afford to reach that goal. Clara was created to provide a safe bridge that brings the insurance market into reach for more schemes and their members,” True said.
Clara, which operates on a ‘bridge to buyout’ model, is backed by investment firm Sixth Street which has over $74 billion in assets under management.
The trustees for the Sears Retail Pension Scheme said they were “delighted” to have reached this agreement and were confident that the proposed transfer was firmly in its members’ best interests.
“We have been carefully managing the Scheme with the aim of securing all members’ benefits with an insurance company through a full buy-out in the future… The Scheme’s current administrator Isio will remain in place and Clara is committed to putting members’ needs first, which will ensure members continue to receive the excellent quality of support we have committed to as trustees,” the trustees said.