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City dealmaker in talks to snap up stricken fund – and safeguard payouts for its 15,000 members

A CITY dealmaker who once worked for Boris Johnson has held talks over an audacious rescue of the stricken Debenhams department store staff pension fund, The Mail on Sunday can reveal.

In a move that could trigger a wave of similar salvage deals, Edi Truell’s Pension Superfund has held detailed discussions with t he Debenhams administrator and The Pensions Regulator about a plan to snap up the £1 billion scheme.

A deal would mean many of the Debenhams scheme’s 15,000 members would escape forfeiting part of their future pension payouts.

Without a rescue, they face losing up to 10 per cent of their future pension income under rules imposed by the Pension Protection Fund.

The PPF lifeboat takes over company defined benefit pensions – known as ‘ final salary’ schemes – when firms go bust or can no longer afford to cover the costs.

An administrator’s report seen by The Mail on Sunday said ‘ initial engagement with bulk transfer specialists including Pension Superfund’ had continued into late last year when regulatory ‘clearance of a potential transaction’ was discussed. No deal is imminent but the liquidation of Debenhams and sale of the brand and website to Boohoo last week have once more galvanised discussions, sources said.

Sources told the MoS that Truell has also considered swoops on the pensions of other failed retail chains including House of Fraser.

Truell’s team have also reportedly examined the pension funds of Sir Philip Green’s Arcadia Group and bust tour operator Thomas Cook.

All parties involved in the discussions declined to comment.

Truell was drafted in as pensions adviser to Johnson in 2015 during his time as Mayor of London. His is one of a new breed of superfunds, which include rival Clara, that have promised to provide an alternative to the PPF and insurers.

If Truell – renowned for his aggressive private equity deals – can pull off his ambitious plan, it could deliver a huge boost to the former employees of failed companies.

In September, Pensions Minister Guy Opperman said he was ‘a massive supporter’ of superfunds which buy up the pension schemes of firms that have gone bust and consolidate them into one giant fund.

‘I have pushed very, very, very hard and there will be significant take- up in my view,’ Opperman said. He added that superfunds ‘are the way forward’ to safeguard retirement plans.

The PPF currently manages £36 billion of assets for 276,000 members who worked for failed firms. It guarantees to pay the full pensions of those who have already reached their scheme’s pension age, which is typically 65. However, those who were below pension age when their company went bust receive only 90 per cent of their entitlement.

Trustees, regulators and administrators are understood to be discussing a transfer of both Debenhams staff scheme and its executive fund that would avoid relying on the PPF.

Its pension scheme was £160 million in surplus, according to its 2018 accounts. Sources said the chain’s retirement fund was topped up before it was floated on the London Stock Exchange in 2006, and again more recently ahead of a restructuring of the business that was being scrutinised by the regulator as far back as 2018.

Despite tough checks to gain the approval of The Pensions Regulator, there is said to be optimism that a deal to avoid the PPF can be reached. Aviva has reportedly shown interest in the executive scheme.

Profit-seeking superfunds are not without controversy and sources said the regulator is keen to ensure the first approval is watertight.

Independent pensions consultant John Ralfe said: ‘Superfunds have been around for a couple of years and, as yet, no deal has been done. They need to make sure that the first deal is a good one.’