TPR launches tough new interim regime for emerging superfund pension market

18 June 2020

TPR publishes on its website:

“Guidance will help protect savers and give employers and trustees more choice ahead of Government legislation

The new guidance, which comes into force immediately, sets out TPR’s expectations for how DB consolidator superfunds and other new models must show they are well-governed, run by fit and proper people and are backed by adequate capital. It also explains how they will be assessed and regulated.

The regulatory regime announced by TPR is interim to ensure clear rules are in place as these models emerge. It ensures that savers and the PPF are protected while providing employers and trustees with more choice during this period of uncertainty caused by COVID-19.

TPR believes DB superfunds have the potential to offer benefits for pension savers and sponsoring employers, such as economies of scale and good governance. However, before a permanent regime is in place, TPR has acted to introduce a stringent set of standards and robust regulatory framework to manage the risks and to ensure that retirement incomes are protected. Trustees need to be certain that a transfer to a superfund is in their members’ interests. They should also only consider using a superfund or new business model once TPR has completed its assessment. TPR will be providing more information for trustees and employers in the coming months.”

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