In recovery from an association with insurance

There is no so over-used an epithet than superfund. There is only one superfund and it’s called Clara – named after Claire Altmann – now an annuity whizz at Standard Life while Clara is no more than a waiting room for buy-out.

Pension SuperFund was an explicitly capital backed to an v high level of safety, and explicitly ‘shared outcomes’ model. Investors made a return on their capital backing… but only if members also received a ‘Christmas bonus’ at the same time. Sadly TPR/DWP/Treasury would not stand up to the relentless lobbying of the ABI and an ideological faction that to this day cannot recognise that a single covenant is always more risky than a pooled financial covenant, nor that in the long term, bonds are always producing worse outcomes than equities and productive assets

There’s been a want to be pension superfund known as Pension Superfund and it’s no secret that it’s founder Edi Truell wanted to help, I was right beside him.

I think it fair, we have supported John Hamilton- Stagecoach’s chair of trustees and Nick (the Bush) Chadha. , who has worked hard to keep Stagecoach’s pension scheme out of the maw of insurers

I am getting some commiseration for Edi Truell and myself for not providing a capital backed journey for firms like Aberdeen and Stagecoach. This is kind but unnecessary.

A journalist and one I respect has written to me.

Poor superfunds – I’m not sure legislators / regulators have been kind / helpful enough to date…

On Tuesday we (the Pension PlayPen ) host Nick Jones who is promoting Punter Southall’s capital back journey plans, providing support though a sponsor that is a capital buffer. It’s got the name “the Pension Safeguard Solution” . It uses the capital supplied by Carlyle.

A good idea is a good idea and it is only when the market feels that innovation is acceptable that Pension Safeguard Solution and other variants that use superfund legislation and regulation , will get going.

My hope and hope for other capital backed variants that we may in a loose sense called superfunds, that Aberdeen and Stagecoach’s pension schemes will lead the way. They are not a superfund themselves but they use innovation to drive innovation forward.

I do hope that Pensions UK will recognise that superfunds and their variant the capital backed journey plan will get some recognition. Indeed it would be good to see Pension UK acknowledging what Aberdeen and Stagecoach have done. The swap of sponsor from the unwilling (Stagecoach PLC)  to  most willing (Aberdeen PLC ) does not involve capital so the term “superfund” or the legislation that goes with it, cannot be applied.

The idea that an asset manager can have an appetite for the risk of managing a pension fund is so radical today that no-one remembers that companies were proud of their DB funds and what it did for members and sponsors. It seems to me that TPR and to a lesser degree or involvement of FCA, have woken up that DB plans can be a source of much needed growth rather than unacceptable risk. May superfunds be seen in the future in this light.

You can be in the conversation with Nick Jones of Punter Southall and the Pension Safeguard Solution on Tuesday by using this link.