Defined benefit (DB) consolidator fund Clara Pensions is to take on its fifth pension scheme, it announced today, while launching a new section of its structure for smaller schemes.
The superfund consolidator has agreed to take on the Videndum DB Pension Scheme, with 500 members and £43m of assets. Members’ benefits will be secured through an additional capital injection from Clara upon completion of the transfer.
Matt Wilmington, chief transactions officer at Clara Pensions, told Pensions Expert that the Videndum scheme was transferring into a new section of Clara designed to offer a “streamlined” option for smaller schemes. The new client is the smallest that Clara has onboarded so far.
“So we can facilitate smaller transactions, we’ve opened up a new section and [Videndum] members will transfer into that section,” Wilmington explained. “It will remain open for members of other smaller pension schemes to transfer into, so we can be more efficient and streamlined with those smaller transactions.”
Streamlined superfund process for small schemes
The new section means smaller pension schemes do not incur the expense of negotiating bespoke terms and Clara does not have to set up a separate section, as is the case for larger clients.
“We’ve seen some good innovation in the bulk annuity space. We’re very keen to replicate that and to be able to serve the smaller end of the market.”
Matt Wilmington, Clara Pensions
In addition, pooling smaller schemes together can help secure better terms when transferring to an insurance company later down the line, Wilmington indicated.
He added that schemes looking to access this section of Clara need clean data so they can transfer in efficiently. “All of these elements add up to make a big difference for some of those smaller schemes,” he said.
“There’s a strong need for solutions at the smaller end of the market,” Wilmington said. “We’ve seen some good innovation in the bulk annuity space. We’re very keen to replicate that and to be able to serve the smaller end of the market.”
Multiple insurers and consultants have launched dedicated bulk annuity services to help small pension schemes – typically those with less than £100m in assets – access pension insurance.
Stakeholders praise ‘straightforward’ process
Jon Bolton, company secretary at Videndum, a camera equipment manufacturer, said: “The company has been working over a long period of time to secure Videndum Pension Scheme members’ benefits. With the scheme now in a strong financial position, we have taken the decision to transfer the scheme to Clara, which will further strengthen and secure members’ benefits for the long term.”
“This agreement shows how superfunds like Clara can make pensions safer for members, trustees and employers now and in the future.”
Jonathan Repp, Mercer
Tom Stockley and Cath Williams of Aretas Trustees were professional trustees for the scheme. Williams said the process for transferring to Clara was “constructive and straightforward”.
Jonathan Repp, director at Mercer, which advised on the transaction, said: “This agreement shows how superfunds like Clara can make pensions safer for members, trustees and employers now and in the future. From our work on other superfund deals, we know a practical, cooperative approach helps make these transactions successful.”
More deals expected this year as momentum builds
Clara has reported a pipeline of more than 30 DB pension schemes at various stages of negotiations with the superfund.
Wilmington said these ranged from around £30m in size to as much as £2bn, and he emphasised that Clara was keen to be seen as a “whole of market provider”.
“You can see the benefits to members of superfund transactions, the benefits to sponsors, and to trustees as well,” he said. “It’s very much part of this scaling of our operation to be able to service all of the pension funds that are out there and ready for a superfund transaction.”
Wilmington further explained that momentum for the superfund model has been boosted in recent months as the Pension Schemes Bill has progressed through parliament, bringing a legislative framework for superfunds.
He added that Clara’s other deals had also given trustee boards and advisers confidence in its model and range of services. Its deal with the Wates Pension Fund at the end of 2024 showed that Clara could work with active sponsors, Wilmington said, while its subsequent transaction with the Church Mission Society Pension Scheme involved a “connected covenant” arrangement.
The superfund’s other transactions to date involved the pension schemes for retailers Debenhams and Sears.
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