TPT to launch run-on DB superfund

• TPT’s new consolidation vehicle aims to be the UK’s first TPR assessed superfund designed to run on.

• TPT has secured capital to fund the first £1bn of transactions.

• Focused on members, it plans for there to be a distribution from the surplus to scheme members.

• A successful assessment from TPR would create TPT’s sixth pension scheme consolidation proposition, and represent further innovation following its multi-employer CDC scheme plans and the launch of its income for life default DC retirement product.

TPT Retirement Solutions (TPT), one of the UK’s leading workplace pensions providers, has today announced its intention to launch a new Defined Benefit (DB) superfund designed to support run-on.

Both The Pensions Regulator (TPR) and the Department for Work and Pensions (DWP) have expressed their support for superfunds, which offer schemes an alternative endgame solution.

Superfunds are designed to take on the obligation of meeting the liabilities of corporate DB pension schemes from their original sponsors. They are particularly suitable for schemes that don’t have large surplus funding positions and cannot afford alternatives such as a full buy out with an insurer.

Currently, there is only one superfund that has been assessed by TPR in the UK market, and it targets buy out as its end goal. TPT’s superfund proposition, designed to run-on, will broaden the range of endgame solutions available to employers and trustees. TPT has secured capital to fund the first £1bn of transactions which it anticipates will be sufficient to support a number of deals subject to scale, regulatory approval and market conditions.

Pension superfunds present a huge opportunity for choice in the broader consolidation market. With many schemes experiencing improved funding levels over recent years, superfunds represent a viable route for those schemes that still fall short of full funding on a buy out basis. Currently, 4 in 5 UK DB schemes are in surplus with an aggregate funding level of 120% on a technical provisions basis. Superfunds that run-on are well placed to invest in growth assets, supporting the Government’s ambitions for the UK economy.

TPT has developed its new superfund with members’ interests at the core. Its focus will be to increase the likelihood that members receive full benefits, with distributions to members from the surplus from year five onwards, increasing to majority of surplus once the risk capital has been returned to the investor.

By pooling schemes together, spreading the risk and putting experienced fiduciary managers at the helm, pension superfunds allow sponsors to step away from the ongoing costs and administrative burden involved with running individual schemes.

Superfunds are required to hold additional capital over and above the scheme’s assets, to provide a buffer that trustees would not have access to in a standalone scheme. Once a scheme transfers to a superfund, responsibility for the scheme no longer sits with the ceding trustee and reliance on the employer covenant falls away. The intent is to ensure an increased likelihood that members receive full benefits. TPT’s superfund will be established with an independent Trustee Board and full-time executive team.

TPT’s planned superfund follows the May announcement of its intention to develop a multi-employer CDC proposition, and the recent launch of its DC income-for-life proposition. Pending regulatory authorisations, TPT will have six different consolidation vehicles, making it a clear industry leader and standout pioneer of pension solution development.

TPR has outlined clear guidance on DB superfunds, giving trustees confidence in the due diligence process.

Nicholas Clapp, Chief Commercial Officer at TPT Retirement Solutions, said: 

“We’re very excited to announce our plans to launch a superfund that targets run on rather than a bridge to buy out. There is real opportunity here, and our intention to launch a superfund forms part of a broader ambition to offer a full suite of consolidation options to schemes to suit their bespoke needs."

David Lane, Chief Executive of TPT Retirement Solutions, said: 

“At TPT, we believe consolidation vehicles such as this provide better outcomes for members. They benefit from economies of scale supporting TPR’s ambitions for fewer, larger, well-run schemes which provide better value for money. By design, superfunds also come with big pools of capital for investment – the creation of which aligns closely with the Government’s ambitions for economic growth.”

Notes to Editors

TPT Retirement Solutions (TPT) is one of the UK’s leading providers of workplace pensions with over 75 years’ experience of managing defined benefit and defined contribution pension schemes. It has £11.1 billion of assets under management (as at 30 September 2024) and more than 470,000 members.

TPT’s mission is to make pension schemes perform better for everyone, from the sponsoring employers and trustees to the members who are saving for the future. It is an innovative, forward-thinking organisation, investing in technology to improve the services they provide. TPT is ultimately owned by a pension fund, providing genuine alignment of interests with those of its clients and scheme members.

Our ownership

TPT Retirement Solutions Limited is wholly owned by Verity Trustees Limited in its capacity as trustee of The Pensions Trust.

TPT Investment Management Limited is a wholly owned subsidiary of TPT Retirement Solutions Limited.

Group Services & Regulation

Verity Trustees Limited is the corporate trustee of The Pensions Trust and The Pensions Trust 2016. It is a company limited by guarantee and is regulated by The Pensions Regulator. Registered in England and Wales under company number 00744017. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT.

TPT Retirement Solutions Limited provides pension management and administration services to UK pension schemes. Registered in England and Wales under company number 09639961. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT.

TPT Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FCA) and provides investment management and consultancy services to UK pension schemes. Registered in England and Wales under company number 14527587. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT.