Marc Hommel, EY Senior Pensions Advisor, comments on the pension superfunds interim regime announcement from The Pensions Regulator (TPR):
“The announcement from the Pensions Regulator on pension superfunds will be welcomed by employers and trustees under pressure to find a solution to discharge their pension obligations while securing better deals than the status-quo for their pension scheme members. Pressure has increased even more in recent months due to the impact of the COVID-19 pandemic.
“However, don’t expect a rush of transactions to happen quickly. There are significant questions still to be answered from potential providers of capital into superfunds around the attractiveness of returns and, in any event, the process and due diligence that trustees must carry out for a transfer to a superfund to go ahead is complex and lengthy. In addition, trustees and the Pensions Regulator will need some time to process and clear each request.
“There is still considerable work to be done before a permanent superfund regulatory regime can be established. It is in everyone’s interest that sufficient and quality capital can be attracted to support better outcomes for pension scheme members, and the sooner a permanent and sustainable regime can be established to achieve this, the better.”