LCP advises on the £210m transfer to Clara of the Wates Pension Fund

The Trustee of the Wates Pension Fund together with Wates Group have jointly agreed to transfer members’ defined benefits to pension specialist Clara, providing members with increased financial security in the longer term.

As part of this, Wates will make an investment of around £19m and Clara will provide additional capital, collectively increasing the security of members’ benefits. This is in addition to contributions of more than £75m that Wates has paid into the Fund over the last eight years.

LCP acted as lead transaction adviser to the Trustee including supporting on negotiating with the sponsor, agreeing the detail of the transfer with Clara, and underaking an assessment of the Pension Regulator’s “gateway tests”.

The transfer to Clara – covering 1,500 members and £200m of scheme assets – is expected to complete in January 2025. Clara specialises in managing member benefits transferred from pension schemes and is overseen by a board of experienced professional independent trustees. The Pensions Regulator has provided regulatory clearance for the transfer to Clara.

Sam Jenkins, Risk Transfer Partner at LCP, who advised the Trustee of the Wates Pension Fund on the transaction, said:

“It has been a pleasure leading the advice to the Trustee on this landmark transaction. It required advice on multiple workstreams concurrently and was made possible by careful planning and collaborative working between all parties. The end result is a robust commercial agreement with Clara that provides a secure home for members’ benefits and a bridge to insurance in the future.”

“It is also extremely pleasing to see this transaction expand the range of credible ‘end-game’ options for pension schemes and their sponsors.”

Mike Roberts, Chair of Trustee, Wates Pension Fund, said:

“This is a very positive development, providing increased security for members’ benefits.”

“Throughout this process, we have seen the care and commitment Clara has for its members. This, coupled with the additional funding secured from Wates Group and Clara as part of the transfer, has been key to our decision making.”

“We are confident that, with the transfer to Clara, members’ benefits will be more secure and, in the future, move to an insurance company sooner than if they remained in the Fund.”