Hogan Lovells

Key Dates

tPR issued guidance on 21 October 2020.

tPR issued previous guidance on 18 June 2020.


Summary

The Pensions Regulator (tPR) has issued guidance for trustees and employers considering transferring scheme assets and liabilities to a superfund.  This follows guidance issued in June 2020 setting out standards superfunds are expected to meet in the interim period before the requirements for authorisation and regulation can be included in primary legislation.  Key points from the new guidance are as follows.

Clearance and interaction with tPR

Gateway principles

tPR draws on “gateway principles” outlined in previous consultation by the DWP:

(i)            A transfer to a superfund should only be considered if the scheme cannot afford to buy out now, based on the scheme actuary’s estimated buyout funding level at a date no more than one month before the date of the clearance application.

(ii)           A transfer to a superfund should only be considered if the scheme has no realistic prospect of buyout in the foreseeable future, given potential future employer contributions and the employer’s insolvency risk.  The “foreseeable future” will be specific to the employer’s circumstances but, in general, should be up to five years.

(iii)          The transfer to a superfund must improve the likelihood of members receiving full benefits.

Expectations of trustees and employers

Communication with members

Any member options exercises should be follow best practice standards. 



Date Accessed: 03/12/2021