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Article | Pensions Briefing

Thinking of moving into a superfund? The six steps trustees should take first

By Hazel Kendrick | February 24, 2022

Making the decision to move into a superfund will involve a lot of deliberation. Hazel Kendrick, WTW senior director, explains how the advisory process works.
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At WTW, we have designed a six-step process that will help to take the stress out of the process for trustees and scheme sponsors.

  1. 01

    Understand the proposal on the table

    The first stage is understanding the rationale, especially in situations where the sponsor is putting the proposal to the trustee board. At this stage try to speak to the proposed superfund to understand its level of engagement and motivation. This first stage is very much exploratory.

  2. 02

    Establish the facts

    The second stage is to get the facts on the table. What are the circumstances relating to the scheme and/or the sponsor? What is the balance of powers in the trust deed and rules? What is the position on the assessment of covenant and funding? What other issues could come into play; for example, does the scheme have illiquid assets that could delay or prevent progress?

    This needs to be a truly collaborative process between your legal, covenant, investment and transactions advisers, as well as your scheme actuary, who will play a key role at this stage.

  3. 03

    Develop the best alternative solution

    What could be your best alternative solution – or solutions – in the scheme’s current set of circumstances?

    At the end of this stage, you should have a credible alternative baseline of solutions to the proposal initially put on the table to take you through to stage four.

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What might alternative solutions to the superfund proposal look like?

We would approach this by addressing the question “What would we do if this proposal was not on the table?”. For example, can the scheme achieve similar or even better member outcomes without transfer to a superfund? The impact of commonly available options should not be underestimated – amongst other things this includes: options around a more optimal investment strategy, use of a fiduciary manager, a clear commercial business plan to get to buyout, a defined benefit master trust, the impact of member options, etc. We will advise on the impact of all these factors.

We’ll also advise on whether third party contingent capital solutions can be brought into play to offer the buffer capital benefits of a superfund whilst still retaining your link to the sponsor.

Ultimately, we are looking for the best target end-game for the scheme and the journey plan to achieve that. There is no one size fits all. Schemes in the scenarios we’re considering will all have their own nuances and the answer depends as much on technical analysis as it does on softer factors such as the trustee board’s appetite for complexity vs simplicity.


  1. 04


    Compare your alternative solution/s against your starting point. Don't get bogged down at this stage with analysis. This is about developing clear recommendations, with member outcomes at the fore of the decision making.

  2. 05

    Agree the way forward

    It’s time to make a decision. What are you going to do and who do you need to help you with that decision? At this stage, your governance and stakeholder management processes will be in full flight.

  3. 06


    Implementation can be quite wide-ranging. At this stage, you may decide on full implementation, which could mean a full transfer to a superfund. Conversely, you may decide that the best thing to do at this stage is to press pause and wait until circumstances change.


Thank you for reading. If you would like to learn more about superfunds, please contact your WTW consultant, Costas Yiasoumi or Hazel Kendrick. You could also read our interview with Clara’s chief executive, Adam Saron, or find out what the approval of the first superfund means for trustees.


Senior Director, Transactions
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Senior Director, Transactions
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