Key findings include:
Of schemes that have agreed their preferred endgame and are not deliberately staying flexible, 74 percent plan to move to an insurance solution once it is achievable. This included some schemes that need to run on for a short period in order to be settlement ready.
24 percent of schemes that have agreed their preferred endgame, intend to run on beyond the point needed for risk settlement readiness.
Buyout and run-on remain the key choices with only 2 percent of schemes targeting a superfund transaction, less than 1 percent targeting a pension captive solution, and, as yet, no respondents actively considering a sponsor succession transaction with an asset manager, similar to the recent Aberdeen:Stagecoach deal.
57 percent of respondents are now fully funded on a buyout basis.
Among sub-£500 million schemes that had reached a view, 84 percent intend to insure at the earliest opportunity with 14 percent seeking to run on further and 2 percent targeting a superfund transaction.
By contrast, among schemes of more than £500 million, there is a finer balance with 54 percent seeking to insure at the earliest opportunity and 46 percent seeking to run on for the long-term or for a shorter period of time.
James Patten, partner in the UK Endgame Strategy team at Aon, said: “After the Pension Regulator’s June 2025 endgame guidance and its recent Annual Funding Statement that encouraged schemes to focus on endgame planning, this survey gives real insight into current market practice on endgame decisions.
“When comparing this survey with last year’s, we see more endgame decisions made, with only 15 percent of respondents describing themselves as ‘undecided or deliberately staying flexible’ compared with 23 percent in 2025. However, with a growing range of endgame options, improvements in insurer pricing, new surplus flexibilities, and an uncertain geopolitical and economic environment, we expect to continue seeing schemes revisiting previous endgame decisions until they are fully committed to delivery. Whatever their choice, it’s vital that they have reviewed the complete range of options and are fully aligned on their objectives - or they could face issues in the future.”
“Buyout and run-on remain the dominant endgame options in the market. The £1bn+ schemes that are running-on are predominantly doing so actively, with a view towards the generation of surplus. However, our survey suggests a split in market practice between sub-£500 million schemes and those that are larger. Among sub-£500 million schemes, insuring at the earliest opportunity is by far the most popular option – possibly supported by the keen insurer pricing seen over the last 12 months. For those above £500 million, there is a much finer balance between insuring at the earliest opportunity and running on beyond this.
“Schemes moving into surplus has inevitably raised new and developing issues. After excluding respondents without a surplus - and who therefore had chosen to have no surplus policy – we found that 28 percent of schemes had some form of agreement on surplus or a formal surplus policy. A further 31 percent intend to consider a surplus policy this year. Not doing so could lead to deferring returning capital to sponsors in a difficult economic environment, or getting to a situation where older generations of members regard themselves as losing out on the opportunities that accessing surplus might offer. It’s clear that it can be beneficial to put a surplus policy in place before a surplus emerges.”
The Aon 2026 Endgame Survey is available by contacting talktous@aon.com
|
