The Pension SuperFund’s response to DWP Consultation on DB Pension Scheme Consolidation

The Pension SuperFund has published its response to the DWP consultation on DB Pension Scheme Consolidation, highlighting the significant improvements in expected outcomes that superfunds can offer members today and dispelling the comparisons that have been made with insurance. The response underlines that there are more similarities between superfunds and existing pension schemes than there are differences. The key distinction of models such as the Pension SuperFund is the introduction of significant new, external capital to stand behind members’ existing pensions promises. The central role of trustees is a key theme, both for the member-focused oversight of superfunds and taking the significant decision to transfer existing schemes into such vehicles.

The UK has a pensions problem: namely a fragmented landscape of sub-scale funds and the cost and distraction that their management brings to UK businesses at the expense of jobs and growth. Ultimately, this puts members’ benefits at unnecessary risk. The Pension SuperFund does not offer insurance or claim to replicate its outcomes, but there are many circumstances where members and their sponsors can benefit enormously from such pension-based solutions. The Pension SuperFund wants to ensure that this opportunity isn’t wasted. The imposition of the same or stricter capital constraints would make it impossible to offer more affordable solutions.

CEO Luke Webster said: “We strongly support a comprehensive regulatory regime to underpin pristine governance and complete transparency of risk, so that trustees can, with confidence, make the crucial assessment of whether their members can expect to be better off on transfer to a superfund. We look forward to working with the DWP and other stakeholders to establish a balanced, principles-based approach that will provide clarity and assurance, without precluding innovation.”

Chris Hitchen, Chair, said: “Whilst there are no guarantees, members can expect to be better off under the Pension SuperFund. Moreover, UK businesses will be freed up to concentrate on what they do best, to the benefit of this country and its citizens.”

Richard Wohanka, Chairman of Trustees said: “The decision to transfer to a superfund is about the long-term future for members, and the unique circumstances of every scheme, together with the element of subjectivity in evaluating sponsor covenant, mean that the role of trustees has never been more important. Regulation should not usurp those roles and responsibilities. Within superfunds, the vital role trustees will play safeguarding members’ best interests should be recognised and supported by any forthcoming legislation.”

For further information, please contact:

Robbie Steel: 07538775701
Rimmi Shah: 07963014027


Notes to Editors:

The Pension SuperFund is the UK’s first consolidating pension ‘superfund’, offering a safe and affordable way for British businesses to keep their pension promises to employees.