‘Bridge to buyout’ provider Clara-Pensions is looking into whether to introduce a new offering where profit extraction is permitted before buyout, following the Pensions Regulator’s recent update to its superfunds guidance. 

 

A separate offer that allows profit extraction for Clara and its funders would likely be available at a lower cost than Clara’s standard services, making it potentially attractive for schemes that could not normally afford to enter the provider. Clara currently says it will not access a scheme’s surplus “until every member in that section has their full benefits secured or provided for”. 

 

Chief executive Simon True welcomed TPR’s latest guidance update and called it “an important step forward for the superfund model”. 

 

The updated guide – which specifies that capital can be released up to twice a year if certain conditions are met – enables more schemes to access consolidation, True said. 

  

He added: “We particularly welcome the Regulator’s dynamic approach by updating the guidance for the second time – responding effectively to market need in a way that will support the growth of the sector. We look forward to working with the regulator and the government in the coming months through the Pensions Review to create more secure pensions for DB members." 

 

   

Clara has announced two deals so far since its founding in 2017, for Sears and Debenhams. Both were announced only this year, with schemes and sponsors hesitant to be first movers after the government decided not to include superfunds in the Pension Schemes Act 2021. Legislation is now set to be in the pension schemes bill announced earlier this month. 
   

   

   

Where is the balance between affordability and member interests?