The series will offer a range of resources to help corporates consider what to do with a DB surplus, look at whether a run-on strategy is right for them and consider how to build a robust strategy. The leading pensions and financial services consultancy’s new series will be kick-started with the launch of its first paper. This sets the scene around the current DB environment looking at how the UK has evolved in recent times, and what the resurgence of run-on really means for sponsors.
The series aims to unpack and explain the implication of a number of developments that have signalled a period of transformation for DB schemes, and provide sponsors with the insights they need to make informed, forward-looking decisions. Although the UK DB market has contracted in recent years, surpluses have become a key focus for many sponsors. A growing number of schemes are choosing to run on, a trend that is only expected to accelerate in the coming years. In parallel, upcoming legislative changes, particularly the anticipated Pensions Bill, are poised to have a significant impact on the wider pensions market. DB surpluses are another common aspect that sponsors are also looking at.
Commenting on the need for DB schemes to understand what surplus means and how it can benefit their scheme and members, Sachin Patel, Head of Corporate DB, Hymans Robertson, says: “DB schemes are entering a new era. Surpluses are becoming more common, and with the government looking to unlock pension assets for economic growth, the role of DB schemes is rapidly evolving. Our new ‘DB Surplus and Run-on’ series is designed to help sponsors navigate this shift, providing the background and offering practical guidance on managing surpluses and building a robust framework to support a clear run-on strategy.
“With nearly £1 trillion held across around 300 DB schemes, the potential impact on the UK economy is significant. Yet for many sponsors, past missteps have left lasting marks, and the complexity of the current environment can be overwhelming. That’s why it’s more important than ever to have a clear view of the options available, and to understand what recent developments mean for your scheme.
“The opportunities are significant. Our analysis shows that through annual distributions, a fully buy-out funded £1 billion scheme, with a reasonable investment strategy, could distribute over £130 million (in today’s terms) across the next decade at the median level. These are numbers too substantial to overlook.
“Now is the time for sponsors to reflect on their endgame strategies and take decisive action. For those considering run-on, establishing strong governance and a clear decision-making framework is essential to support all stakeholders. With the Pensions Bill on the horizon, there’s no better moment for DB schemes to plan ahead. This new series is designed to provide clarity, structure, and support as you take the next step into this evolving future.”
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