DB consolidators

Move come as consolidator prepares to conduct first transactions

Companies are increasingly looking to consolidators, superfunds and other sophisticated financial structures to help remove their defined benefit (DB) liabilities, The Pensions Regulator (TPR) says.

Caroline Kurup explores the latest TPR guidance on superfund transfers and what scheme trustees should be considering

Pension scheme trustees and sponsors should only seek to transfer members’ benefits to a defined benefit (DB) consolidator if there is no “realistic prospect of buyout in the foreseeable future”, The Pensions Regulator (TPR) says.

Defined benefit (DB) schemes will have to wait an extra year and a half on average to agree a buyout compared to their pre-Covid-19 endgame journey plans, Barnett Waddingham estimates.

Superfunds could be on course to complete multi-billion-pound transfers of defined benefit (DB) funds by the end of this year, Isio says.

Pension Insurance Corporation has reiterated its call for the establishment of a new consolidation vehicle, run by a not-for-profit agency, to target smaller underfunded schemes with weak sponsors.

With the launch of an interim regime, the consolidation market is set to take off. But before superfunds begin taking on schemes, the regulator must have 'rigour and understanding' of the market, David Fairs tells James Phillips.