Wates Defined Benefit Pension Scheme, Leatherhead, England, will transfer 1,500 plan participants to the £1.4 billion ($1.8 billion) superfund Clara Pension Trust, London, according to a news release.
The Wates plan’s £200 million in assets will now come under Clara’s management. The sponsor firm Wates is one of the largest family-owned construction companies in the U.K.
Clara operates a “bridge to buyout” model, where the ultimate aim is to secure participant benefits via a buyout with an insurance company.
This manner of defined benefit consolidation received regulatory approval by the U.K. government in December 2021. Clara has previously onboarded member benefits from the £590 million Sears Retail Pension Scheme, London, and the £600 million Debenhams Retirement Scheme, London.
Matt Wilmington, chief transaction officer of Clara, said in the news release: “This is another exciting day for Clara, for Wates and for our new members. Working with Wates, whose commitment to the care of its former and current employees was to the highest standard, has been a true pleasure.”
Under the terms of the transaction, Wates will contribute an additional £19 million of funding to support the plan in the form of a one-off payment and Clara will provide additional capital to enhance the security of participant benefits.
This is the first U.K. superfund transaction to be completed by an active business, with both Sears and Debenhams having been wound up prior to the deals with Clara.
Legal advice was provided to Clara by legal firm Osborne Clarke, and its trustees by Eversheds Sutherland.
