Ralph McClelland comments on Nuffield Health scheme boosting security with ABF
Not-for-profit healthcare provider Nuffield Health has entered into an asset-backed funding arrangement for its £377.1m defined benefit pension fund, as schemes continue to secure benefits with tangible goods.
ABFs, also known as asset-backed contribution arrangements, provide an income stream to a pension scheme via a special purpose vehicle – usually a Scottish Limited Partnership.
Pensions legislation limits the amount of investment schemes can make into employer-related assets, but the legal characteristics of an SLP mean it is possible for a pension fund to invest in them without falling foul of these rules.
Bill Jangra, head of pensions at Nuffield Health, said that as part of the triennial funding discussions in 2016, “Nuffield Health took steps to provide the members of Nuffield Health Pension and Life Assurance Scheme with greater member security in the unlikely event of future insolvency”.
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