(Recasts, adds minister, adviser)
By Carolyn Cohn
LONDON, Nov 30 (Reuters) - Pensions consolidator
Clara-Pensions is open to deals to manage UK company final
salary benefit schemes after becoming the first British firm to
win regulatory clearance to act as a superfund, it said on
Tuesday.
Pension superfunds are designed to manage several pension
schemes together, and offer a lower-cost alternative to insuring
them through a so-called bulk annuity of the type provided by
life insurers such as Aviva, Legal & General and
Phoenix.
"Clara’s member-first model is ready for transactions," said
Clara-Pensions' Chief Executive Adam Saron, adding that the firm
was now planning its deals for the coming year.
British companies have nearly two trillion pounds ($2.67
trillion) in defined benefit, or final salary, pension schemes,
most of which are closed to new members.
Nearly half are in deficit, and many companies are looking
to offload the schemes, which can be a drag on their balance
sheets.
The Pensions Regulator said on Tuesday that Clara-Pensions
was the first superfund to pass its assessment process.
The superfund model is new https://www.reuters.com/article/britain-pensions-superfunds-idUSL5N20T4Y4
but has similarities to the Dutch pension system, where
individual company pension schemes have been joining bigger,
sector-wide programmes.
Superfunds can "increase protection for savers and their
pensions, whilst providing employers with a new, affordable
option to manage their legacy pension responsibilities”, said
Britain's minister for pensions and financial inclusion Guy
Opperman.
But the structure has come in for criticism from bulk
annuity providers on the basis that it may provide less
protection for policyholders.
"It is vital...that trustees and employers still carry out
their own thorough due diligence to ensure they are confident a
superfund is the right option for their particular scheme and
members," said Nicola Parish, TPR’s executive director of
frontline regulation.
Employers should only consider a superfund which is on the
TPR's list, she added. "We expect employers considering a
superfund to come to us for clearance.”
The first superfund deals will likely be finalised next
year, said Iain Pearce, senior risk transfer consultant at
pensions consultants Hymans Robertson, though he added that he
expected the regulator to "closely scrutinise all cases".
($1 = 0.7490 pounds)
(Reporting by Carolyn Cohn; Editing by Huw Jones and Jan
Harvey)