Bridge to buy-out
From ACT Wiki
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 (DB)
- Governance
- Pensions
- Resolution
- Superfund
- Trust
