Second Clara transaction with Debenhams Retirement Scheme brings necessary scale to bolster superfund market

Clara has today announced that it has completed its second superfund transaction. This transaction comes just four months after its first landmark deal and reinforces the view that superfunds offer a viable endgame option for pension schemes with distressed sponsors.

The Debenhams Retirement Scheme has been in PPF assessment since 2019. Clara’s transaction provides new support and protections and means that the benefits of over 10,000 pension scheme members are now projected to be secured and paid in full. This includes back payments of £4m to members to restore benefits for those who received reduced pensions whilst in the PPF assessment period.

The transaction also means Clara now have over £1bn of assets under management. This size brings efficiencies and increased scale, and we only see this improving as further transactions are completed over the coming months.

LCP act as investment consultant to Clara Pension Trust, and helped to support with the investment aspects of the transaction including the transition to Clara.

Commenting on the transaction, Dev Gandhi, Senior Consultant at LCP, said: “Clara’s second superfund transaction has come swiftly, demonstrating the market’s growing confidence and means - in less than 6 months since its first transaction - Clara’s asset base has already reached over £1bn. With a growing interest amongst other schemes - and any concerns around being an ‘early adopter’ eased - we expect the superfund market to go from strength to strength in the months ahead.”

Jonathan Griffith, Partner and Head of Endgame Innovation at LCP, added: “Transfers from the PPF that provide full scheme benefits are rare. This deal provides further proof that superfunds are key players in the UK pensions landscape and illustrates the drive and innovation across the industry to ensure that member pension promises can be met in full. I am delighted to see the Clara model continue to grow and provide viable endgame options for a range of pension schemes and sponsors to consider.”