With an increasing number of DB schemes no longer in deficit, the options for endgames have broadened – with a corresponding increase in the potential difficulty of decision-making. There is also growing recognition that decisions on running-on or buying-out are not as clear-cut as they might have appeared previously.
James Patten, partner in the UK Endgame Strategy team for Aon, said: “UK DB schemes are now facing a widening spectrum of endgame solutions. Until quite recently, allowing a scheme to run on or move to a buyout was seen by some as a binary choice for many schemes. While Aon’s 2025/26 Global Pension Risk Survey showed these remain popular options, with 52 percent of respondents intending to buy out and 18 percent intending to run on long-term, it’s now clear that there are shades between them.
“For example, our survey showed that 22 percent of respondents were interested in a flexible run-on approach, potentially involving short-term run-on before moving to a buy-in - sometimes to enable a run-down in illiquid assets - or doing phased buy-ins made over a longer period. We saw a number of large schemes continue this approach in 2025.
“Schemes are now being presented with a smorgasbord of endgame solutions. We are seeing a diverse range of run-on strategies that depend on scheme priorities. We also expect to see more superfunds seeking to enter the market in the near-term, potentially targeting different benefit outcomes for members. The Department of Work and Pensions has signalled its commitment to make this market thrive and its gateway principles are due to be simplified from 2028.”
James Patten continued: “In addition, the recent Aberdeen Stagecoach deal could pave the way for similarly constructed transactions, involving a change in scheme sponsor. Adding to this list, pension captives can also work particularly well in certain circumstances.
“This greater variety of available solutions is of course welcome, but it doesn’t make reaching a decision any easier for trustees and sponsoring employers. They are recognising that the endgame decision creates a defining legacy for both scheme members and the sponsor – making it all the more important to avoid a feeling of ‘buyer’s remorse’ once a decision has been made. Schemes need to make certain that they have fully considered all the options, are up-to-date with market developments when doing so and have ensured that there is a clear audit trail of the decisions made.
“Trustees and sponsors can cut through some of the complexity and ensure better decision making by taking an initial step back to review their fundamental objectives. They can then develop their preferred strategy collaboratively, having fully weighed-up the options and before focusing on the all-important implementation.”
Aon’s UK Endgame Strategy Team has advised over 100 scheme sponsors and trustees on their endgame decisions. Aon continues to invest in its Discover, Develop, Deliver framework which helps schemes through this process, taking account of all the latest developments and following the Pension Regulator’s June 2025 guidance.
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