Developing a first-of-its kind superfund transaction

How we led advice on the UK’s first and only operational defined benefit superfund

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A landmark transaction

Our team led the advice for a landmark pension transaction that saw the Church Mission Society (CMS) Pension Scheme transfer members to Clara-Pensions, a defined benefit (DB) superfund.

This deal marked the first UK superfund transaction for a scheme with a sponsoring employer in the not-for-profit sector, and the first transaction to adopt a ‘connected covenant’ structure, demonstrating the growing accessibility of innovative risk transfer solutions.

The benefits of the innovative structure included: 

  • For the Trustee and Scheme members – an enhanced level of security, superior to either the existing employer covenant or a ‘standard’ superfund capital buffer.
  • For CMS – immediate removal of ongoing pension costs, and a reduction of more than 99% in exposure to future pensions-related risks, allowing the organisation to refocus on its core charitable purpose.
  • For all parties – a significantly streamlined approach to achieving ‘clearance’ for the transaction from the Pensions Regulator. 

Under the transaction, 730 members and £55 million of assets were transferred to Clara.  Members continued to receive their full pension entitlements, with no disruption to payments. In line with Clara’s model, the Scheme has begun to move towards full insured buyout of five to 10 years. 

We advised the trustee throughout the process, delivering integrated support across risk transfer, actuarial, administration and investment consulting.  We played a pivotal role in helping the trustee and sponsor to navigate the process of obtaining regulatory clearance for the transaction.

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They played an integral role in helping the Church Mission Society Pension Scheme secure its ground-breaking ‘connected covenant’ superfund transaction with Clara-Pensions. The actuarial, investment and administration teams worked flexibly and collaboratively with the Trustee, Sponsor and other advisers to achieve positive outcomes for all parties.
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Richard Hubbard (Capital Cranfield), Independent Chair of Trustees for the CMS Pension Scheme
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Our DB pension consulting services

Our experience in retirement and pensions demonstrates our position as a trusted adviser to both employers and trustees, while providing technical expertise and innovative pension technology for all needs.

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