Ex-pensions lifeboat boss in talks about £100bn 'SuperFund' role

The former boss of the UK's pensions lifeboat is in talks about a role at the helm of a new 'SuperFund' that will target the pooling of £100bn of British companies' retirement liabilities.

Sky News has learnt that Alan Rubenstein, who won plaudits for his stewardship of the Pension Protection Fund (PPF (Shenzhen: 300258.SZ - news) ), is in negotiations about becoming the inaugural chief executive of a company provisionally named Pensions Security Corporation (PSC (Taiwan OTC: 6577.TWO - news) ).

The new company is being put together by some of the most experienced figures in Britain's pensions industry, and comes at a time of heightened concerns about the ability of many UK companies to fulfil commitments made by their defined benefit schemes.

This week, ministers published a pensions white paper which contained proposals for strengthening regulators' powers, including the ability to punish bosses who put their company's pension scheme at risk.

Warburg Pincus, the global private equity firm with a long track record of backing financial services companies, has been approached about becoming a major investor in PSC, according to insiders.

Edi Truell, the founder of Pension Insurance Corporation (PIC), a company which is now a fixture in the pensions buyout sector, is among the architects of the new plan, which is promising attractive returns to investors.

Mr Truell has approached a string of blue-chip investors about providing funds to enable Disruptive Capital, his private equity firm, to participate in the new business.

People familiar with PSC's business model say that it would target the pooling of £100bn of better-funded private sector pension schemes whose trustees are capable of writing a cheque to allow them to offload their liabilities in full.

The schemes would then be consolidated into a single so-called 'SuperFund', giving them the prospective cost and investment benefits associated with such a vast pool.

There are approximately £400bn of assets in defined benefit schemes that will be considered by PSC, according to one source.

PSC is already said to be in exploratory discussions with the stewards of pension schemes with a combined £20bn of liabilities.

It expects to build the pool of pension obligations it sponsors and services to £20bn within five years and £100bn over the longer term.

Sources said that Luke Webster, chief investment officer at the Greater London Authority and a partner at Disruptive, would play a key role in PSC.

Marc Hommel, the former global head of pensions at PricewaterhouseCoopers, is also expected to be involved, they added.

If Mr Rubenstein does join PSC, it would be a major boost to the new vehicle's prospects, because of the high regard in which he is held in both Whitehall and the City.

He was ‎thrust into the public spotlight two years ago following the collapse of BHS, which left 20,000 retirement scheme members facing an anxious wait for news about their pension pots.

The PPF played a significant role in discussions about the deal ‎- including forcing the appointment of a second administrator - which eventually saw Sir Philip Green, the former BHS owner, agreeing to pay up to £363m towards a new scheme.

Mr Rubenstein was also involved in talks about a deal to secure the pensions of thousands of British workers at Tata Steel (BSE: TATASTEEL.BO - news) and more recently at Toys R Us, which crashed into administration earlier this month.

A former investment banker at Lehman Brothers, Mr Rubenstein joined the PPF‎ in April 2009, when the agency ‎was just 80% funded in terms of its liabilities.

‎The PPF now has a funding ratio in excess of 121%, thanks to a strong investment performance which has enabled it to generate a surplus.

Funded by a levy on private companies, it insures millions of workers' pensions.

Mr Rubenstein, Mr Truell and Warburg Pincus all declined to comment on Tuesday.