On 15 October, the eagerly awaited Pension Schemes Bill (the Bill) had its first reading in the House of Lords. Whilst the Bill addresses the launch of collective defined contribution (or CDC) pension schemes and includes provisions enabling pensions dashboards, employers will be particularly impacted by the new requirement on trustees to produce a funding
Superfunds are a hot topic right now in the pensions industry. A consultation on the regulation of superfunds has recently closed, and a response from the Government is expected in the near future. But what are superfunds, and why might they be of interest to an employer with a defined benefit (DB) pension scheme?
What is a “superfund”?
- A superfund is an occupational pension scheme which will, at a cost, accept a transfer of assets and liabilities from a DB pension scheme.
- It’s a relatively new concept – there aren’t currently any operational superfunds, although market entrants are actively seeking business.
- The entity running the superfund will be aiming to make a profit and distribute returns to external investors. The expectation is that this can be achieved through cost efficiencies, better access to investment opportunities and the pooling of risk.
- They will be regulated by the Pensions Regulator (although the authorisation framework is not yet in place) and the intention is that they will be eligible for the PPF.