The Pension Schemes Bill signals the government’s backing for superfunds, but further detail is needed on how capital requirements will be calibrated, Clara Pensions CEO, Simon True, has said.

Speaking in a session at the Pensions UK Annual Conference, True said: “The Pension Schemes Bill gives a statement of intent by the government that says they back super funds and think there is a benefit to those members of being in a stronger, stable structure, where you benefit from scale.”

True said that the proposed changes relating to superfunds were “relatively slight” and therefore “not much of a surprise”.

He welcomed the simplification of gateway tests, saying it removes some of the barriers faced by trustees and “makes life a little easier for them”.

However, True emphasised that the key issue still lacking clarity is the calibration of capital, an area where “no detail has been provided”.

While the government has shown a commitment to engagement, he warned that the framework remains “very old”.

“The intent is good, the content isn't quite there, and of course, how it gets actually implemented is really the acid test for it,” he said.

Continuing the discussion on the bill, Zedra Governance trustee and Pensions UK DC Committee chair, Joanne Fairbairn, highlighted concerns about how the proposed default retirement solutions will operate in practice.

“I think there's a very big question that's still out there as to when is the trigger? And I don't think that's in the legislation at the moment,” she said.

Fairbairn outlined the complexity of determining when defaults should take effect - whether at the point members start withdrawing cash, typically in their mid to late 50s, when they formally begin taking retirement income, or even for those who never contact their scheme administrators.

“There are still lots of unanswered questions, but also huge potential for improvement,” she concluded.

On the superfund front, these comments come amid recent developments, such as TPT’s plans to launch a run-on superfund backed by £1bn in capital, that highlight growing interest in alternative endgame models.

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