PwC comments on completion of first pension superfund transaction

Commenting on Clara Pensions completing the first superfund transaction with the Sears Retail Pension Scheme, Matt Cooper, Head of Alternative Pension Solutions, says: 

“As an increasing number of pension schemes explore end-game options, superfunds offer schemes with weaker sponsors an alternative solution to enhance the security of members’ benefits. 

“According to our analysis, there are around 500 DB schemes that may be suitable to enter into a superfund with aggregate assets of £100bn. Although a small proportion of the £1.4trn 5,000 private sector DB pension schemes market, this corresponds to around 750,000 pension scheme members who could potentially benefit from a superfund. The market for pension schemes able to potentially benefit from transacting with a superfund is sufficiently large to support a number of superfunds to achieve the scale needed to make them commercially viable. 

“Superfunds are an innovative development in the UK pensions industry. Today’s announcement should give sponsors and trustees greater clarity in the viability of superfunds as an accessible alternative end-game option and we expect other transactions to follow.”

Notes to editors:

PwC analysis is based on scheme funding information as at 31 March 2023 provided by the Pensions Regulator and considers the c.5,000 private sector DB pensions schemes (i.e. excludes public sector pension schemes and LGPS) which have in aggregate £1.4trn of assets. 

500 DB schemes with aggregate assets of £100bn based on pension schemes with a weak or tending to weak covenant, a funding level of 80% to 100% of buyout and size of £10m to £5bn.