Guidance from The Pensions Regulator (TPR) requires those setting up and running a defined benefit (DB) superfund model and other new consolidators, including directors, senior managers and trustees, to demonstrate good governance and adequate capital, and describes how these funds will be assessed and regulated.

“Superfunds” allow employers to consolidate existing schemes by replacing the sponsoring employer with a special purpose vehicle, and transferring assets and liabilities to that vehicle. Superfunds may cover several unconnected employers and are aimed at schemes that don’t expect to be able to buy out in the foreseeable future (the TPR suggests five years as the “foreseeable future”).

The guidance was issued in advance of legislation on these consolidator funds, establishing an interim regulatory regime to ensure clear rules are in place as new models emerge.

Related resource

• Defined benefit superfunds (The Pensions Regulator, June 2020)