Consolidators and superfunds

The environment in which DB schemes operate has become increasingly challenging. For closed schemes where buy-out with an insurer is an unobtainable goal in the near term, employers and trustees are increasingly looking for ways of reducing costs and managing liabilities and risks.

DB consolidation is an area of interest that has gained traction in recent years in response to this and has received support from the pensions industry and regulators.

DB consolidation can range from shared services and asset pooling, to single governance models such as DB master trusts or transfers to DB “superfunds” where the link with the sponsoring employer is cut.

While the superfund market is in its infancy, we have advised on several transfers to DB master trusts and our broad experience advising trustees of pension schemes, together with our industry involvement and expertise in general risk management solutions means we are well placed to advise trustees and employers interested in this developing area.

How we can help

  • Advising trustees and employers on the use of DB master trusts, including the process for transferring liabilities
  • Advising trustees on legal issues to consider in response to a transfer to a superfund, and the process for doing so
  • Advising employers on legal aspects of a transfer to a superfund, including clearance applications and liaison with TPR

Please see further useful reading material below:

Hot Topic: DB superfunds – what trustees need to know

Alert: TPR issues superfund guidance for prospective ceding trustees and employers

Pensions Age article: Guest comment: A look at TPR’s DB superfund guidance – Pensions Age Magazine