Is a DB superfund the right endgame option for your DB scheme?

DB superfunds are DB pension schemes into which other schemes can consolidate, removing the link with the existing sponsor and transferring the risk to the superfund provider

The benefits provided to members by the superfund mirror the scheme’s benefits. The scheme can benefit from economies of scale which can be achieved via consolidation.

Superfunds can offer another risk transfer route for trustees and sponsors to bulk purchase annuity insurance.

Before DB superfunds arrived, the main exit option for a scheme and its sponsor was a bulk annuity buy-out with an insurer. DB superfunds now offer an alternative exit option.

Until October 2026, Clara-Pensions (‘Clara’) was the only DB superfund to have completed the Pensions Regulator's assessment process. The Clara model consolidated schemes to reach an endgame of an insurance buyout transaction in 7 to 10 years (and so is referred to as a ‘bridge to buyout’).

As of October 2026, TPT superfund has now passed the assessment process – offering an alternative run-on superfund model with the potential for surplus sharing with members over time. We expect further superfunds to launch in the coming months as the market expands.

The case for an individual DB superfund transfer must be “cleared” by TPR and must be assessed as meeting the ‘gateway tests’ (the conditions for transfer).

The legislative footing set out in the 2026 Pension Schemes Act – combined with public and private statements from DWP and from TPR – lead us to believe that many schemes with a buy-out deficit could present a rationale for a superfund transfer which TPR is likely to support.

How LCP can help you to consider superfunds as a risk transfer route for your scheme

Having advised the trustees of schemes involved in three of Clara’s eight transactions to date (covering eight scheme transfers), LCP has extensive experience of the superfund transfer process, including The Pensions Regulator’s (TPR’s) approach to providing “clearance”.

Discover more

We are well placed to support you in considering whether a superfund is the right endgame option for your scheme, with expertise across all key areas: pension risk transfer, covenant, investment, regulatory and actuarial.

Explore all services for DB pensions

We have insights from our roles in advising key participants in the superfund market, including the trustees of Clara and of TPT superfund on investment and advising other potential entrants to the superfund market. This gives us an unrivalled perspective on the current and future direction of this market which is reflected in our strategic advice to our clients.

We acted as the trusted lead adviser on the transfer of six Marelli schemes to Clara in first of its kind transaction. Watch our webinar as LCP experts, alongside teams from Clara and Zedra, take a closer look at the deal and what schemes can learn from new approaches to DB consolidation.

Watch now

Exploring superfunds

: A DB superfund is a pension scheme…

A superfund is simply a registered pension scheme, managed by its own set of trustees and with its own advisers, into which other schemes can transfer its liabilities and assets. The benefits provided to members by the superfund mirror the scheme’s benefits and the link to the existing sponsor is typically broken on a transfer.

… with a capital buffer

The superfund’s investors provide capital to support the liabilities transferred to the superfund. This capital is ring-fenced outside of the scheme, but it can be accessed by the scheme to support it if funding is required.

: Once a pension scheme has transferred its members to a DB superfund, the remaining scheme can be wound up and removed from the sponsor’s balance sheet.

To support the transfer, a superfund has investors who provide capital on day one to provide a long-term support for the liabilities being transferred.

Schemes moving to a superfund are exchanging their sponsor covenant for the financial covenant offered by the Superfund (i.e. the capital / financial support provided by its investors) as well as (typically) an upfront cash injection from the sponsor.

Therefore, the key question when assessing whether a superfund is appropriate is whether the transfer to the superfund is expected to improve member outcomes (including the likelihood of receiving their benefits in full). A clearance application has to be submitted to the Pensions Regulator explaining how the Trustee has concluded the transfer is in members’ best interests.

Our multi-disciplinary advice teams (spanning pension risk transfer, covenant, investment, regulatory and actuarial) give our clients the confidence in reaching a robust view on this key question and in presenting this to other key stakeholders, including the Pensions Regulator.

: The appropriateness of a DB superfund will depend on the circumstances of your scheme and the key strategic objectives of the sponsor and of the trustees.

In particular, trustees, sponsors and ultimately the Pensions Regulator will need to be satisfied that a transfer to a superfund will improve the position of members (taking into account funding, investment and covenant considerations).

An initial feasibility should be undertaken to evaluate a superfund transfer. This would involve assessing a superfund transfer against your key strategic objectives and against the alternative end game options available to the scheme and its members, such as an insurance buy-out or run-on. It will assess which route is likely to deliver the best outcome for members.

As the superfund market develops, with new entrants and enhanced competition, the lower price and reduction in timescales for risk transfer via a superfund as compared to insurance may be material for some schemes – leading to an important decision for sponsors and trustees on whether a superfund may be the appropriate end game destination for their scheme. There will also be greater differentiation between the superfund providers, with increased options for trustees and sponsors considering a superfund transfer as their endgame.

Get in touch with one of our experts to see which option might be right for you

Until October 2026, Clara Pensions was the only DB superfund to have completed TPR’s assessment process. The eight superfund transactions completed to date have therefore all been transfers to Clara.

To date Clara has completed eight transactions

With each transaction marking an important milestone for the superfund market in ‘proof of concept’ for the superfund model and paving the way for further innovation in the DB endgame space. These are as follows:

The first Clara transaction was for the £590m Sears Pension Scheme in November 2023, where there was no existing sponsor of substance. This was the first superfund transaction to be cleared by TPR and demonstrated a workable pathway for future transactions.
The £600m Debenhams Pension Scheme followed in April 2024 – a PPF+ case which saw members move from PPF compensation level to full scheme benefits within Clara. This demonstrated Clara’s role as a real alternative for schemes previously destined for the PPF.
The £210m transfer of the Wates Pension Fund in December 2024 marked the first for a non-distressed, ongoing sponsor – with the employer making a material contribution to meet Clara’s transfer price and improve member security. LCP led the transaction advice to the trustee for this ground-breaking deal which demonstrated that a DB superfund is now a viable alternative exit option for a much broader range of schemes, and was widely seen as a catalyst for DB superfund market growth.
In June 2025, Clara announced the first “connected covenant” deal with the transfer of the £55m Church Mission Society, which was also their first with a not-for-profit sponsor. Under this model the members transfer to Clara (in the same way as other transactions) but the sponsor provides a continuing contingent guarantee to the relevant section of Clara. At £55m, this transaction was the first Clara deal in the sub-£100m market and the first to demonstrate the viability of Clara’s connected covenant approach.
Clara transacted their first deal under their ‘Small Scheme Solution’ with the transfer of the £40m Videndum Scheme in April 2026. LCP acted as the Trustee’s actuarial, investment and covenant advisers on the deal, advising the Trustee in assessing the transfer to Clara against TPR’s superfund gateway tests and in providing the actuarial certification required for the transfer to go ahead, as well as advising on all aspects of managing the investment risks of the transaction. Read more here - Videndum’s transfer to Clara evidences the growing momentum behind the Superfund market.
Another £40m transaction under the small scheme solution followed swiftly in September 2026, with this scheme transferring into the same segregated section of Clara as the Videndum Scheme.
The Arco Limited transaction in September 2026 was significant as this was part of the sale of Arco Limited.
In October 2026, six schemes sponsored by Marelli transferred to Clara in a first-of-its-kind transaction, marking Clara's eighth transaction. Over 3,300 members and £250m of assets transferred together into a single section of Clara. LCP acted as the Trustee’s lead adviser on the transfer, providing risk transfer, actuarial, covenant, investment and administration (including data services). You can read more about LCP’s role here: LCP advises six Marelli schemes on their transfer to Clara in first of its kind transaction.

: The Pension Schemes Act 2026 will establish a firm legal framework for DB superfunds which, combined with greater competition from new DB superfund entrants, is expected to give rise to further momentum in this market another option for trustees and sponsors considering a risk transfer endgame.

As the superfund market develops, with new entrants and enhanced competition, we expect improvements in pricing which may lead to material reductions in timescales for risk transfer via a superfund as compared to insurance for some schemes – leading to an important decision for sponsors and trustees.

All schemes underfunded on buy-out should have superfunds now in the mix of end game options under consideration. And with developments in market practice, the situations in which a superfund may form part of a scheme’s end game strategy will continue evolve.

Discuss your end game options with one of our experts