Our role
Advisers to the Wates Group and lead transaction advisers
Featuring
A family-owned development, building and property maintenance business
The outcome
Safeguarded benefits and increased security for defined benefit pension members
We advised Wates Group on the transfer of its defined benefit members to Clara - as the demand for innovation in end-game solutions for pension schemes continues to drive the superfund market forward.
Setting the scene
Founded in 1897 by Edward Wates, the Wates Group is a cross-generational family-owned development, building and property maintenance business.
Wates continually reviewed its pension provisions, working closely with the Wates Trustee as part of their joint commitment to protect the interests and benefits of members.
Given the risk and uncertainty associated with the defined benefit pension scheme, Wates was seeking a solution to address this challenge, as well as improving the security of members’ benefits.
Our work
We advised Wates Group on the transfer of its defined benefit members to Clara, a pensions superfund.
Clara is designed to offer members safer pensions. It takes on the pension benefits payable under defined benefit pension schemes, then works towards securing those pension benefits with an insurance company in, on average, five to ten years.
Our team were advisers to the Wates Group and the lead transaction advisers on the project. We led the commercial discussions with Clara, working collaboratively with the Wates Pension Fund trustee and its advisers to deliver the transaction. This called for a breadth of skills, including actuarial, covenant, investment, risk transfer, tax, and accounting.
To deliver the best outcomes for the 1,500 members required a significant investment from the Wates Group of around £19m to Clara - which also contributed additional capital. Close collaboration between the Wates Group and Trustee of the Wates Pension Fund, and thorough engagement with the Pensions Regulator to achieve clearance for the transaction were also essential.
Our impact
This is a landmark pensions transaction, paving the way for corporates and trustees to think more broadly when it comes to the options available to improve member outcomes. It brings the role of superfunds into a new focus for a wider scope of trustees and corporates alike, who are aiming to achieve the best outcomes for their members but are not yet ready for an insurance buy-out.
This transaction is validation of the role of superfunds and will accelerate momentum in the superfund market. We expect to see potential interest from other providers who want to enter the superfund market, which will drive further innovation.
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