Superfund Clara-Pensions will take over the £600m Debenhams Pension Scheme, ensuring that 10,400 employees of the former department store will get their pensions paid in full.
This is the second pension scheme to move into the DB superfund, after Clara took over the £600m Sears Retail Pension Scheme late last year.
This latest transaction will be the first time a pension scheme has exited a PPF assessment, the lifeboat fund set up to provide more limited DB benefits when schemes run into financial difficulties and are unable to meet their obligations, often due to employer insolvency. The transaction to Clara will mean full pension benefits are restored to members.
As part of the deal an additional £34m of ring-fended capital will be injected by Clara-Pensions to further improve the security of benefits.
Hymans Robertson has advised Debenhams Pension Scheme and its trustee on this bulk transfer. Vidett has been the independent trustee while Osborne Clarke acted as legal advisor. Broadstone has also worked with advisers trustees and the PPF to secure this transaction.
Hymans Robertson’s head of alternative risk transfer Iain Pearce says described this as a “fantastic outcome” for members.
He says: “This has been far from certain during the period since the Scheme entered PPF assessment in 2019. It has been exciting to support the emergence of superfunds as a new valuable option for trustees. It’s enabled the trustees to continue, in challenging circumstances, to fulfil the promise previously given to members.”
He adds: “The process and framework for a superfund transaction is very different to other de-risking solutions. We’re very pleased to have brought our experience of delivering innovative solutions to this transaction.
“Our clarity on the key requirements and commitment to engage positively with the de-risking market as a whole was also important in achieving this transaction. It’s great to see that it has resulted in such a positive result for members and to have maintained a very high level of confidence from all stakeholders from start to finish.”
Liz Loosmore, head of Broadstone’s PPF team says: “We are delighted to be on the PPF’s Specialist Administration and Actuarial Services panel and it’s been great to be part of the scheme’s journey, navigating trough the PPF assessment and helping get the scheme transaction ready.” SHe said Broadstone would continue to deliver administration services to members of the scheme as its enters the Clara Pensions superfund.
PPF chief customer officer Sara Protheroe adds: “This is a positive outcome for members of the Debenhams Schemes. When a scheme enters PPF assessment our focus is always to protect members and achieve the best available outcome for the scheme. We’re please that the collaborative approach working with Clara, has helped secure a better than initially expected outcome fmembers.
“This deal also demonstrates the success of our PPF+ Advisory panel which we introduced in 2022 to supper overfunded schemes to explore options beyond the PPF as well as the PPF’s ability to continue to evolve to meet the needs of the changing landscape of DB pensions.”
