Debenhams Pension Scheme agrees on £600m bulk transfer to Clara-Pensions

Pension scheme trustees for Debenhams have agreed to enter into a superfund deal with Clara-Pensions, a transaction that will see the transfer of £600 million of the former British retailer’s pension assets to Clara.

When Debenhams collapsed in 2019, over 10,000 members of its pension plan were transferred to the UK’s pensions lifeboat, the Pension Protection Fund (PPF).

The completion of this superfund transfer, the first deal of its kind, will be taking the scheme out of PPF assessment and restore full benefits for members.

Clara Pensions, a new commercial pension “superfund” operator, through this model pension schemes aim to improve their funding positions over 5-10 years and then buy a bulk annuity.

Hymans Robertson acted as lead transaction advisor to the Trustee of the Scheme, with Osborne Clarke acted as legal advisor.

Commenting on the deal, Iain Pearce, Head of Alternative Risk Transfer and Lead Advisor, Hymans Robertson said: “We’re thrilled to have secured this fantastic outcome and helped find a way for members to have their full entitlement restored by transferring benefits to Clara. 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.

Pearce continued: “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.”

Harry Allen, Senior Risk Transfer Consultant, Hymans Robertson added: “It’s also been great to deliver this project within the PPF panel framework, which seeks to bring together industry experts for schemes in assessment to deliver the best possible outcomes for members.

“We expect that this will accelerate the process for building understanding and knowledge of superfund transfers within the industry, in doing so driving efficiency and reducing execution risk for these transactions.”

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