Navigating your endgame: the DB superfunds junction

With The Pensions Regulator’s (TPR) assessment of the Pension SuperFund and Clara-Pensions entering what are hopefully the final stages, thoughts within the industry are turning towards what the first defined benefit (DB) superfund transactions will look like and how to set a long-term objective with a superfund transaction in mind.

To avoid the possibility of being too close to buyout by the time a superfund transaction is feasible (and so failing to meet the gateway principles), this could mean targeting an “affordable” level of deficit to a superfund transaction and putting in place a suitable journey plan. 

As transactions do start to happen in due course, we will start to see how the gateway principles are applied in practice, rather than just in theory. So it will be important to maintain flexibility in these journey plans to be able to react to what remains a developing market.

In fact, even if your ultimate target is buyout or something else, this still highlights how important it is to be aware of all of your options as you navigate towards your scheme’s endgame, as some of them may disappear without you even realising it.