Stewart Hastie, Pensions Partner at KPMG said:
“We welcome the proposals for superfunds which means that they can now be a reality. It gives the industry much needed clarity and we can expect some deals to complete by Q1 next year along with more superfunds coming to the market.
“Superfunds will not be the right solution for all schemes, but in some circumstances they make a lot of sense and can improve member benefit security.
“However the proposals do seem contradictory as the additional regulation potentially makes it harder for schemes to access them. Superfunds cannot provide a more affordable alternative without also being somewhat riskier. For example, a requirement to ensure a 99% success rate (compared with 99.5% in the insurance regime as a crude comparison) may prove difficult to deliver at an affordable price point for a wider range of schemes that could really benefit from the option.
“The consultation also insists that PPF protection remains in place as a backstop for members which is the right thing to do.”
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About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.