Pension superfunds have "come of age", Hymans Robertson has said, after its latest report on alternative risk transfer revealed a shift in opinions on superfunds, from a place of "widespread scepticism to viewing them as a "valuable addition" to the market.

Completed deals over the past two years have helped to build understanding and confidence for future transactions, Hymans Robertson said, with the market perceptions of superfunds "transformed" as a result.

According to the report, the changing market dynamics will see super funds take on more leading roles in the risk transfer market.

Hymans Robertson said that as future transactions are expected to attract interest from potential new providers, The Pensions Regulator (TPR) will play a key role in responding to changing market dynamics.

However, the firm warned that while TPR will operate within the future superfund legislation to regulate this market, a balance between regulation and supporting innovation must be maintained.

Commenting on the success of superfunds and the role they could play in the future of the risk transfer market, Hymans Robertson head of alternative risk transfer solutions, Iain Pearce, said: "As superfund transactions become more common, we anticipate more schemes to view these as an attractive option.

"This could drive a positive feedback loop that could result in additional superfunds entering this market in the years ahead.

"As the market changes, it would be remiss of us not to expect some teething issues with how new regimes are developed and applied. Endgame decisions can be complex.

"In our view, the tests laid out by TPR are a blunt tool and may not always be an accurate barometer for assessing the suitability of schemes to enter a superfund transaction.

"We expect an evolution of how these tests are conducted to ensure that these do not become a blocker when a superfund transaction would be a positive outcome for members. This would enable greater freedom for trustees to choose their preferred defined benefit (DB) endgame in line with their fiduciary duty."

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