Clara-Pensions, the member-first consolidator for defined benefit pension schemes, today welcomed the formal launch of the regulatory regime for consolidators by The Pensions Regulator (TPR), with support from the Department for Work and Pensions (DWP).
Today’s announcement puts Clara firmly on the path to regulatory approval and, once received, its first transactions.
Adam Saron, CEO of Clara-Pensions, said: “This is a significant and positive step for pension scheme members and the companies that have supported them. We look forward to being fully approved under this new guidance and to welcoming the first members into Clara later this year.
“Businesses across the UK are facing unprecedented challenges and pension scheme funding is under pressure. Risk remains a significant challenge both for schemes and their members. Although pension consolidation is a small piece of the wider economic picture, Clara looks forward to playing our part in supporting businesses and making pensions safer.
“We are keen to progress with our first transactions and are looking forward to providing members with safer pensions as soon as possible.”
Clara’s model acts as a bridge for pension schemes and their members to the gold standard of an insured buyout. Schemes entering Clara benefit from additional patient capital and a safer investment approach which together provide a more efficient journey to buyout.
The announcement by TPR will pave the way for pension schemes to transfer their DB obligations to Clara. Recent events have had a huge impact on all areas of the economy and have weakened many of the employer covenants that stand behind pension schemes. The average funding ratio of these schemes has fallen by almost 7% in the past year (Pension Protection Fund 7800 Index). As both TPR and the Pensions Minister recognise, consolidation can help; Clara can help reduce the burden on struggling UK companies and make pensions safer.