TPT is preparing to launch a defined benefit (DB) superfund, with two cases currently being priced and more than 10 potential transactions in its pipeline.
At a roundtable, TPT said the superfund will build on its existing pensions infrastructure, including around £7bn of DB assets under management. The organisation said it is targeting its first transactions in early 2027, subject to regulatory approval and added that the majority of schemes in its pipeline are external clients rather than existing TPT schemes.
According to TPT, this comes amid improving scheme funding levels and regulatory reforms that are driving greater momentum for endgame solutions.
Proposed changes under the Pension Schemes Bill 2026 are expected to remove Gateway Two, which requires schemes to demonstrate they cannot afford an insurance buyout in the near future, while retaining tests on immediate buyout affordability and improving member security. The government is also considering how the remaining gateway tests should be applied.
According to TPT, stronger funding levels following the gilt market crisis have prompted more trustees and sponsoring employers to focus on endgame planning, with employers exploring alternatives to insurance buyout.
TPT’s superfund allows sponsoring employers to sever their link with a pension scheme by transferring members and assets into the vehicle, supported by an additional capital buffer. The assets are then managed under a long-term investment strategy designed to improve member security.
The superfund is intended to provide employers with a faster and lower-cost route to settlement than insurance buyout, enabling schemes to reach an endgame solution sooner while removing ongoing pension obligations from sponsoring employers.
Its model has been designed as a long-term run-on superfund rather than one that transitions to buyout, allowing greater investment flexibility than insurers and supporting long-term value creation. It is also designed to share future surplus with members once capital requirements have been met.
TPT added that it expects superfunds to become an option for more mainstream DB schemes rather than being used primarily by schemes with limited endgame options.
TPT Retirement Solutions chief commercial officer and TPT Investment Management managing director Nick Clapp says: “We think that’s really critical and aligns to us investing in the solution and delivering good outcomes for members. While members don’t own the superfund or really have a direct fund, they do have a really meaningful interest and a stake in the future and the success of the superfund.
“From year six onwards, a meaningful minority — 20 per cent of any surplus arising — goes to the trustees to allocate to members. It’s not a slightly woolly sort of target; it’s something we commit to do to extend the it delivers. Once we pay back our capital provider to a reasonable and fair level, which we project will be year 12, our view is that the capital buyer has a good return on their assets.
“Then we’re running as a long-term superfund, and the sort of embedded value there — the strong funding level that the scheme had at inception when it came to us — means it’s fair that the majority of that goes back to members. So, at that point, we’re paying 60 per cent of surplus to trustees to allocate to members.”
TPT investment director Peter Smith says: “We don’t have to start from scratch. We’ve got a fully diversified portfolio already, and we’re not having to build that from new, which I think is quite a key differentiator, particularly as you start thinking about private markets and how long that takes to deploy.
“That time horizon means that we can build a portfolio for growth over the long term. We’re not trying to target a specific point in the future where we need to have a certain value of assets.”
TPT head of superfund Steve Collins says: “We feel we timed our market interest quite well. We’ve now got a bit more momentum, a bit more steady flow of transactions, a bit more confidence in the market about how transactions work and when to use them, and a lot more government backing, with the primary legislation regime, Pension Schemes Act, and further support for the regulatory environment coming through.
“The new transactions, the cases we’re talking about, are firmly more mainstream. We’re just a normal pension scheme that’s running on, going about our business, but we’d like to look at superfund as a potential good, safe long-term home for our scheme.
“Not necessarily every scheme that gets there should do a transaction, but they should certainly know that they’re there, understand the options, put it on the agenda, have a discussion, and decide which way they’re going to approach that opportunity. I’d love to see that a bit more in the fabric of the industry.”