Transfer to a DB superfund—trustee and employer considerations
Produced in partnership with Christopher Stiles of Gowling WLG
Transfer to a DB superfund—trustee and employer considerations

The following Pensions practice note produced in partnership with Christopher Stiles of Gowling WLG provides comprehensive and up to date legal information covering:

  • Transfer to a DB superfund—trustee and employer considerations
  • Regulatory regime
  • Considerations when contemplating a DB superfund transfer
  • Checking whether trustees have power to implement transfer to superfund
  • Deciding which DB superfund to transfer to
  • Clearance
  • Clearance process
  • Contents of clearance application
  • Circumstances where clearance is not appropriate
  • Schemes in PPF assessment
  • More...

Transfer to a DB superfund—trustee and employer considerations

The financial pressures involved in funding a defined benefit (DB) occupational pension scheme has led to an increased interest in minimising the financial risks and investment volatility associated with such schemes (known as ‘derisking’). Pension buy-outs are the ultimate way of de-risking, by transferring DB liabilities to an insurance company.

However, a buy-out may be expensive and a transfer to a DB superfund may represent a more affordable alternative.

In broad terms, the Pensions Regulator (TPR) defines a DB superfund as a model that allows for the severance of an employer’s liability towards a DB scheme where either the scheme employer is replaced by a special purpose vehicle (SPV) employer or the liability of the employer to fund the scheme’s liabilities is replaced by an employer backed with a capital injection to a capital buffer. For further information, see Practice Note: Defined benefit (DB) consolidation—what are DB superfunds?

Regulatory regime

While the government works on introducing an authorisation and supervision framework for superfunds, TPR has put in place an interim regime.

For further information on what a DB superfund is and TPR’s interim regime in relation to DB superfunds, see Practice Notes: Defined benefit (DB) consolidation—what are DB superfunds? and TPR’s interim regime for DB superfunds.

TPR's interim regime is set out in the following documents:

  1. its response to the DWP’s consultation on proposals for

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