A number of key factors means that 2026 will prove to be a turning point for the superfund market, according to research by consultancy Lance Clark & Peacock.
These factors include greater regulatory clarity, increased competition, and a widening range of schemes able to persuade The Pensions Regulator to undergo a superfund transfer.
A pension superfund is a consolidator of defined benefit assets from discrete employers, a concept originated by Clara Pensions in 2017 on a ‘bridge to buyout’ model.
LCP highlighted that recent public statements from TPR confirm that they expect three providers to submit for TPR assessment by the end of the year. This means the superfund provider landscape is expected to widen from Clara Pensions as the sole provider to a market of four superfund providers.
According to LCP, new entrants are likely to come to market with alternative models to Clara’s bridge to buyout. For example, TPT Retirement Solutions have publicly confirmed they are in TPR assessment with a run-on superfund which will share surplus with members.
This expansion of the provider landscape was also predicted to create a more competitive market which may result in improvements in pricing and an expectation to see superfund providers looking to differentiate themselves on non-price factors such as member experience.
Laura Amin, partner and head of DB consolidation at LCP, says: “We are seeing several supply side and demand side factors come together for 2026 to be a pivotal year for the superfund market.
“It will be fascinating to see how further innovation in the superfund and wider endgame market – for example in value share propositions – may extend the range of endgame options available for sponsors and trustees and deliver improved member outcomes.”
LCP also claimed that the forthcoming superfund regulations may also result in capital requirements which are more efficient for the superfund providers, which would result in keener superfund pricing.
Developments arising from the Pension Schemes Act, including the expected relaxation of the gateway tests and interaction with surplus regulations, could also significantly widen the range of schemes able to construct a viable case for superfund transfer.