The Pensions Regulator (TPR) has published updated guidance on defined benefit (DB) superfunds following a review of the original guidance.

In a blog post, TPR interim director of policy, analysis and advice, Louise Davey, outlined the key areas of the guidance that had been amended.

Changes have been made that aim to ease the journey for schemes transferring to a superfund, including extending the period for the ‘Gateway’; to provide clarity as to when the regulator believed it is right that a scheme can consider a transfer to a superfund; and to allow for more time to demonstrate that TPR’s expectations for capital have been met.

The guidance also included changes to the regulator’s funding expectations, amending the discount rate from gilts+0.5 per cent to gilts+0.75 per cent, which TPR said reflected changes in the market while maintaining saver security.

TPR noted that the updated guidance signalled a change in its position on profit extraction, adding that it wants to engage further with the pensions industry on how this will work to help create a system that works for providers and members, and it will issue an update “in due course”.

Finally, the updated guidance aims to give greater clarity on some of TPR’s expectations for the assessment process.

When the regulator published its initial guidance in 2020, it committed to a review within three years.

“Through our review, we have kept saver security as our primary focus, whilst creating changes that should allow for the development of a superfund market,” said Davey.

“Trustees will be faced with some complex decisions and will need to obtain appropriate advice to enable them to make an informed decision and to help to ensure that they act in the best interests of their members.

“The potential for superfunds to operate alongside other risk transfer and management options offers the potential for a diverse marketplace. We know that superfunds are just part of innovative developments in the DB marketplace and later this year we will publish guidance focused on other arrangements as well.

“There is more to do here but we are committed to enable innovation in DB which puts better saver outcomes at its heart.”

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