This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The Debenhams Retirement Scheme is exiting Pension Protection Fund assessment and transferring members to stage-to-buyout provider Clara-Pensions in a £600m deal. This is only the second superfund transaction and the first with an insolvent sponsoring employer.
The transaction restores scheme benefits for all 10,400 members previously employed by the department store, which went into liquidation after Christmas 2020.
Back-payments will be made for any PPF haircuts that have been applied, and Clara will inject an extra £34m of capital to improve the security of the benefits.
This is only the second superfund deal ever. Last November, the £590m Sears Retail Pension Scheme agreed to transfer its assets and the liabilities of about 9,600 members to Clara.
The Debenhams Trustee, who were supported by the PPF in considering which options outside of the PPF would provide the best possible outcome for members, have now written to inform members of the intention to transfer their pensions to the Clara Pension Trust.
Mark Cliff, chair of trustees for the scheme, said: “Ever since Debenhams went into administration, the trustees have been working hard to find a solution that is in our members’ best interests. We are confident that transferring members’ benefits to Clara provides the best available outcome for them.”
Cliff said the trustees took extensive advice to assess all the options and consulted with the PPF and the Pensions Regulator throughout the process, and thanked scheme members and advisers.
Alan Pickering, chair of the Clara trustee board, said: “We are delighted to welcome the Debenhams scheme members to our Clara community. We will play our part in ensuring that the next stage in their journey fulfils all their expectations.”
The deal is “another landmark day for British pensions”, said Simon True, chief executive of Clara.
The Pensions Regulator's interim executive director of frontline regulation, Mel Charles, said superfunds can offer increased security, improved governance and better risk management and mean pension savers are more likely to get their promised benefit.
"We want to see fewer, larger, well run pension schemes and are pleased to see the market innovate and consolidate in savers’ interests," Charles said.
The PPF’s chief customer officer, Sara Protheroe, said the transaction was a positive outcome for the scheme members.
“We’re pleased that our collaborative approach working with Clara, coupled with the value from our specialist PPF panellists, has helped secure a better than initially expected outcome for members,” she said.
The panel was set up in 2022 to help overfunded schemes of insolvent companies explore options outside the lifeboat fund.
The deal was advised by Broadstone, scheme advisers Hymans Robertson and Osborne Clarke, and trustee firm Vidett. Broadstone took over the scheme administration in June 2022, being on the PPF’s administration and actuarial services panel, and will continue to administer the Debenhams Section of the Clara Trust.
Superfunds have had a turbulent start, with one provider, the Pension SuperFund, exiting the market last year after failing to achieve a positive assessment by the Pensions Regulator. Its founder Edi Truell on Thursday announced the formal launch of a new DB pension product, Pension SuperHaven, aimed at transferred-out former British Steel Pension Scheme members.
