The Pension Superfund has rejected Pension Protection Fund (PPF) suggestions that consolidators should be subject to a specially-curated levy.
Alan Rubenstein - the co-founder and chief executive of the start-up consolidator - said the superfund's funding safeguards made it low risk and, as such, it should therefore not be subject to any special consolidator levy.
And he argued that, at most, The Pension Superfund should be subject to the levy for schemes without substantive sponsors, which was introduced last year.
Levy amounts are based on the risk a scheme poses to the PPF and, due to the funding controls and capital buffer that would be in place, the superfund would be low risk, he added.
The Pension Superfund will require a 15% capital buffer on its own "prudent valuation basis", with no money able to be taken out of that. And, while surpluses over 115% would be shared between members' benefits and the asset management company jointly owned by the consolidator and its capital providers, if this drops below that level the private equity investors could have to wait "several years" for that hole to be filled.
Rubenstein said it would be odd for another separate levy to be created.
"There is actually a reasonably good basis: [the levy for] schemes without substantive sponsors," he said. "That is essentially what The Pension Superfund is too. Therefore, it would be odd if the basis was very different… but we have to wait and see.
"The idea that they would single out The Pension Superfund or superfunds generally for higher levies is a bit odd in the sense that the legislation is pretty clear that levies are based on risk. Because of the funding level that we would offer, the risk is pretty small. We are absolutely prepared to pay whatever levy but we would expect that levy for us to be pretty small indeed."
The Pension Superfund also revealed it had already received a number of "unprompted approaches", notably from retailers or sponsors seeking to refocus on their business, improve credit ratings, or restructure.
The consolidator is in discussion with an undisclosed number of schemes and sponsors over taking over liabilities, while also discussing with the government, regulators and the PPF the potential regulations that might govern such vehicles.
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