What is a Pension superfund?

New way of running corporate retirement schemes attract capital — and controversy

Oliver Ralph and Josephine Cumbo DECEMBER 18 2018

Pension superfunds — or consolidators— are aiming to collect together several corporate pension schemes and run them more cheaply and efficiently than the companies that set them up.

How will they work?

The companies that set the schemes up (sometimes called the sponsors) will pass all the assets and liabilities in the scheme on to the superfund. The sponsors may have to make a payment into the scheme to enable the deal to happen, and outside investors will also put money in. The superfund will then run the schemes either for decades until all the pensions have been paid, or until the scheme is financially strong enough to be passed on to an insurance company.

Who regulates them?

The Pensions Regulator, under new rules proposed by the government in December 2018.

Article taken from the Financial Times. Read the full article here