New Clara transaction shows widening application – With the new Act to broaden this further

Interested to see that Clara-Pensions has announced that 500 members and £43m of assets from the Videndum DB Pension Scheme will transfer to the Clara Pension Trust.  

Clara have confirmed they have created a new separate section for smaller schemes to transfer into Clara, which will provide ring‑fenced capital in connection with the transaction, intended to enhance the security of members’ benefits as they begin a “bridge to buy‑out” journey. 

While superfund transactions have (to date) often been discussed in the context of larger schemes, this deal is notable because it demonstrates that a transaction of this size can be delivered as part of a scalable pipeline. 

Clara comments its pipeline has grown to over 30 schemes at various stages of discussion. Burges Salmon is working on a growing number of Clara transactions reflecting this.

With the imminent introduction of the Pension Schemes Act and as a result the second gateway test (the requirement that the scheme must have “no realistic prospect of buy‑out in the foreseeable future”) no longer applying, this is another reason why schemes of all sizes can consider Clara as a broad based derisking alternative. 

In essence, these developments mean the Clara will now be available to a wide range of schemes that cannot afford buy out.