Lincoln Pensions survey: 52% of U.K. pension professionals think multiemployer superfunds will be commonplace

29 January 2019

Lincoln Pensions publishes on its website:

“Our DB consolidation survey found that over half of pensions professionals, believe superfunds will become a commonplace solution for certain UK DB schemes. Pensions professionals also believe that superfund regulation should focus on relative covenant strength.

On the survey findings, Darren Redmayne, CEO of Lincoln Pensions, said: “Our inaugural DB consolidation survey reveals unsurprisingly that the security of members’ benefits – or covenant – is rightly at the heart of any decision to “switch covenant” [from sponsor to consolidator]. Any new regulatory regime must focus on ensuring that ‘superfund’ [or similar transactions] deliver genuine covenant improvement. Our survey highlights a concern in the pensions industry that stakeholders will place too much emphasis on probability models to answer the hugely complex question regarding whether the covenant of a consolidator is better. While such modelling will likely play a role in the “covenant test” for consolidation transactions, Lincoln Pensions’ believe it is only one element of a multi-faceted and complex assessment on whether or not to proceed with a consolidation transaction.””

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