Clara-Pensions has reached an agreement with Sears Retail Pension Scheme for the latter to enter into the pension superfund.
The deal will see pension benefits of the scheme’s 9,600 members being transferred into Clara pension superfund.
Under the terms of the transaction, members of the Sears scheme will benefit from an immediate injection of £30m of ring-fenced capital.
Clara, which is backed by Sixth Street, said the transaction is “an important stepping stone” in providing the members with a managed journey to an insured buyout, which is expected to take place within the next decade.
The trustees of the Sears Retail Pension Scheme have written to the scheme’s 9,600 members informing them of the intentions to transfer their pension benefits to Clara and The Pensions Regulator (TPR) has given the transaction clearance on 3 November.
The formal transfer of members will proceed at the end of November, Clara disclosed.
Following the transfer to Clara, the administration of the Sears scheme will continue to be undertaken by Isio. Eversheds Sutherland has advised the Clara trustee throughout the process.
Lynne Rawcliffe, of Law Debenture Pension Trust Corporation and trustee director of Clara Pension Trust, said: “This transfer is in the best interests of all members of the Sears scheme. The immediate day-one capital support of £30m will materially improve the security of members’ benefits and is a major step forward in the members’ journey to an insured buyout.”
Trustees for the Sears Retail Pension Scheme said: “We have been carefully managing the scheme with the aim of securing all members’ benefits with an insurance company through a full buy-out in the future.
“As part of this transaction, Clara will provide an additional £30m of funding, which will support the scheme’s journey to a successful buyout and provide greater security for members.”
Simon True, chief executive officer of Clara-Pensions, said the transaction marks a “landmark day” for Sear’s members as they become first members of Clara and will benefit from the new ring-fenced capital of £30m to support their journey to an insurance buyout.
He added: ”Members will be able to take confidence in the improved financial security of their benefits and the commitment and expertise of Clara.”
True added that insurance remains the gold standard for any pension scheme member, but not all schemes can afford to reach that goal. He said that Clara was created to provide a safe bridge that brings the insurance market into reach for more schemes and their members.
With the first superfund transaction completed, True said that Clara is now “firmly on the road to making defined benefit pensions safer and more secure for thousands of people.
Economic secretary to the Treasury, Andrew Griffith, added that superfunds are an important innovation to British pension provision, pointing out that economies of scale from superfunds can do wonders for pensions, making people’s retirement more secure whilst enabling a broader range of investments in productive finance.
He continued: “It is great to see Clara-Pensions taking on its first 9,600 pension savers – injecting an additional £30m to an existing £590m scheme – and in the process becoming the UK’s first superfund transaction.”