Defined BenefitSep 10 2018

Pension consolidator loses chief executive and investor

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Pension consolidator loses chief executive and investor

The Pension Superfund, a new defined benefit (DB) consolidation scheme, has lost its chief executive, Alan Rubenstein, and one of its main investors, Warburg Pincus, just a couple of months after its creation.

Mr Rubenstein, who was head of the Pension Protection Fund (PPF) until January this year, joined the Pension Superfund in March, when plans were announced to create a vehicle to accept bulk transfers from DB plans and consolidate them into one occupational pension scheme.

At the time, it was announced that he was teaming up with city financier Edi Truell's Disruptive Capital and private equity investor Warburg Pincus to launch the new scheme, which had already lined up an initial £500m of capital.

According to a statement published today (10 September), Mr Rubenstein and Marc Hommel, head of origination of the firm, will be leaving the business after a short transitional period.

Warburg Pincus will not continue investing in the company at this stage, but "retains the right to invest in the Pension Superfund as its business grows", the firm said. 

Disruptive Capital Finance has confirmed it will take on the funding of the business at this point on an ongoing basis. 

The Pension Superfund is expected to announce its trustees and a range of senior appointments in due course as the business moves into the delivery and execution phase.

Edi Truell, chairman of Disruptive Capital and co-founder of The Pension Superfund, said: "I would like to thank Alan [Rubenstein], Marc [Hommel] and Warburg Pincus for everything they have done to bring this innovative solution to market over the last six months.

"We wish them well in the future and part with a strong proposition, a significant pipeline and with The Pension Superfund in a position where it is poised to see its first deal submitted to The Pensions Regulator."

Mr Truell said businesses constrained by their pension liabilities had a "fundamental need to find a more affordable way to fulfil their promises to pension scheme members", and that consolidation had a role to play to meet that need.

He added: "We will now build on all the positive progress made and look forward to announcing the first pension transfers into The Pension Superfund." 

FTAdviser reported in April that the new consolidator won’t be a solution for distressed plans, as schemes will have to be fully funded before moving to the superfund.

The announcement of the creation of the superfund followed the government’s publication of its DB white paper, where it revealed plans to promote consolidation in the DB pension market, in which two thirds of the 5,600 schemes are deemed to have funding shortfalls.