The Pensions Regulator (TPR) has published new guidance for trustees and employers on transferring to defined benefit (DB) ‘superfunds’, as PwC research suggests up to one million pension scheme members and £170bn of assets could take this route over the next decade

DB superfunds offer a way for employers to consolidate existing schemes, by replacing the sponsoring employer with a capital-backed vehicle or a special purpose vehicle (SPV). They create a large retirement savings fund which includes different company schemes, meaning participating employers are no longer liable for member benefits.

TPR launched its interim regime for superfunds in June, ahead of proposed government legislation. The regulator has now published new guidance on the issues trustees and employers must evaluate when considering a transfer, to ensure a superfund is the right option for them and in their members’ interests. Nicola Parish, TPR’s executive director of frontline regulation, said: ‘We know that some employers and trustees are keen to explore whether a superfund could provide another option for their DB scheme and for employers allow them to focus on future sustainability.

‘However, while we await government legislation, we are determined to protect savers who may be moved into a superfund by rigorously assessing providers and then supervising them closely.

‘Trustees need to ensure they are confident a superfund is the right option for their members, the transaction meets the gateway principles and only consider using a superfund named on the TPR website.’ TPR said it continues to assess existing superfunds against the expectations set out in its interim regime, including that they are well-governed, run by fit and proper people and are backed by adequate capital.

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