Bridge to buy-out

Finance - pensions - defined benefit - superfunds.

A financial structure that can be used to reach a defined benefit pension fund buy-out, for example via a pensions superfund.

The Clara Pensions Trust superfund

"The idea behind [pension] superfunds like Clara is simple. For companies and schemes that can’t afford to go straight to the insurance market, they offer a more affordable “bridge to buy-out”.

To undertake a transaction, the pension fund members are transferred from the existing company pension scheme into a dedicated section of the Clara Pensions Trust – a sectionalised occupational pension scheme overseen by a board of independent, professional trustees...

Once inside a superfund, the scheme benefits from significant economies of scale across investment, governance, and member administration that consolidation can provide.

Meanwhile, just as is the case in an insured buy-out, the sponsoring company is freed of its liabilities, leaving it to concentrate on the core business."

A third way to resolve pension scheme risk - Matt Wilmington - chief transactions officer at Clara-Pensions - The Treasurer online - February 2025.

See also

• Bridge
• Bridge facility
• Bridge financing
• Bridge to bond
• Buyout
• Consolidation
• Defined benefit pension scheme (DB)
• Governance
• Pension
• Resolution
• Superfund
• Trust

Other resource

• A third way to resolve pension scheme risk - Matt Wilmington - chief transactions officer at Clara-Pensions - The Treasurer online - February 2025