Pensions - Articles - Superfunds could restrict some schemes options

 Stewart Hastie, Pensions Partner at KPMG said: “We welcome the proposals for superfunds which means that they can now be a reality. It gives the industry much needed clarity and we can expect some deals to complete by Q1 next year along with more superfunds coming to the market.

 “Superfunds will not be the right solution for all schemes, but in some circumstances they make a lot of sense and can improve member benefit security.

 “However the proposals do seem contradictory as the additional regulation potentially makes it harder for schemes to access them. Superfunds cannot provide a more affordable alternative without also being somewhat riskier. For example, a requirement to ensure a 99% success rate [compared with 99.5% in the insurance regime as a crude comparison] may prove difficult to deliver at an affordable price point for a wider range of schemes that could really benefit from the option.

 “The consultation also insists that PPF protection remains in place as a backstop for members which is the right thing to do.”