Clara-Pensions announces UK’s first pension superfund transaction

Clara-Pensions announces agreement with Trustees of the Sears Retail Pension Scheme to transfer members to Clara in UK’s first pension superfund transaction

• Sears’ c. 9,600 Scheme members will become the first to enter a UK pension Superfund as they begin their journey to an insured buyout
• Clara to provide £30m of new capital to increase the security of members’ benefits
• Transfer to Clara has also received clearance from The Pensions Regulator

6 November 2023: Clara-Pensions (“Clara”), the member-first consolidator for defined benefit pension schemes and the Trustees of the Sears Retail Pension Scheme (“Sears”) have reached agreement on the UK’s first superfund transaction.
The Sears Trustees have written to the Scheme’s members informing them of the intention to transfer their pension benefits to the Clara Pensions Trust. Clearance for the transfer has now been received from The Pensions Regulator, and the formal transfer of members will proceed at the end of November. Scheme members will benefit from an additional £30 million of ring-fenced funding to support the Scheme, demonstrably improving member security and providing increased certainty on
their journey to an insured buyout in five to ten years’ time. Clara was established in 2017 and successfully completed The Pensions Regulator’s assessment process for superfunds in November 2021. It operates a ‘bridge to buyout’ model and uses the insurance company. Under this approach, schemes entering Clara are placed in separate sections of the Clara Pensions Trust. Additional capital from Clara’s capital providers is injected to create a funding buffer for the scheme. Clara is backed by Sixth Street, a diversified global investment firm which manages over $74 billion in assets and has more than 500 team members operating around the world.

The Trustees for the Sears Retail Pension Scheme, said: “We have been carefully managing the Scheme with the aim of securing all members’ benefits with an insurance company through a full buy- out in the future. As part of this transaction, Clara will provide an additional £30m of funding, which will support the Scheme’s journey to a successful buy-out and provide greater security for members. The Scheme’s current administrator Isio will remain in place and Clara is committed to putting members’ needs first, which will ensure members continue to receive the excellent quality of support we have committed to as trustees. We are delighted to have reached this agreement with Clara and are confident that the proposed transfer is firmly in our members’ best interests.”

Simon True, CEO of Clara-Pensions, said: “This is a landmark day for Sears’ members, as they become the first members of Clara and will benefit from a day 1 injection of new, ring-fenced capital of £30m to support their journey to an insurance buyout. Members will be able to take confidence in the improved financial security of their benefits and the commitment and expertise of Clara. “Insurance remains the gold standard for any pension scheme member, but not all schemes can afford to reach that goal. Clara was created to provide a safe bridge that brings the insurance market into reach for more schemes and their members. “This agreement with the Sears Trustees is the UK’s first pension superfund transaction. Clara is now firmly on the road to making defined benefit pensions safer and more secure for thousands of people.” Alan Pickering, Chair of Clara Trustee Limited, said: “The Trustee Board of Clara looks forward to welcoming our new members into the Clara community. This is a significant step forward in the members’ journey to securing their benefits and improving member outcomes.”

Notes:

Since undergoing The Pensions Regulator’s assessment process in November 2021, Clara has been preparing for its first transactions and has built strong engagement with around a dozen schemes that are keen to transact. Clara has also assembled a strong pool of advisers, partners and non-executive directors to ensure it can provide its new members with the safest, best experience possible. These include:

Lawrence Churchill, Chairman of Clara’s corporate board and the founding chairman of the Pension Protection Fund
Alan Pickering, Chair of Trustees for the Clara Pensions Trust and the former Chairman of the National Association of Pension Funds, now known as the Pensions and Lifetime Savings Association (PLSA)
Leading consultancies Hymans Robertson and LCP (scheme actuary and investment advisor respectively); fiduciary manager Van Lanschot Kempen and legal firms CMS, Eversheds Sutherland and Travers Smith

Advisers

This transaction was advised by the following parties:

• CMS, legal advisers to Clara-Pensions
• Van Lanschot Kempen, fiduciary investment manager to Clara-Pensions and Clara Pension Trust
• Eversheds Sutherland, legal adviser to the Clara Pension Trust
• Hymans Robertson, Scheme Actuary of the Clara Pension Trust
• LCP, investment adviser to the Clara Pension Trust
• Sackers, legal adviser to the Sears Retail Pension Scheme
• WTW, lead pension risk transfer adviser and Scheme Actuary to the Sears Retail Pension Scheme
• Barnett Waddingham, investment adviser to the Sears Retail Pension Scheme