Navigating the DB Pension Endgame: Lessons from Global Leaders

Navigating the DB Pension Endgame: Lessons from Global Leaders
February 9, 2026 8 mins

Navigating the DB Pension Endgame: Lessons from Global Leaders

Navigating the DB Pension Endgame: Lessons from Global Leaders

Rising longevity, shifting demographics and ongoing regulatory reform are reshaping defined benefit pension strategies. As legacy plans wind down, lessons from mature markets offer practical guidance for managing the final stage of a pension scheme’s journey: the endgame.

Key Takeaways
  1. Endgame strategies, informed by global best practice, help organizations secure member outcomes and reduce long-term pension risk.
  2. Strengthened funding positions create opportunities to accelerate derisking, improving stability and supporting cost-efficient decision making.
  3. Local regulatory insight enables smarter endgame choices, aligning risk transfer, run-on strategies and surplus use with broader business goals.

Aging populations and falling birth rates are placing mounting pressure on pension systems worldwide. In Europe alone, the dependency ratio is expected to climb sharply over the next two decades, threatening retirement adequacy and prompting governments to raise pension ages and reduce benefits.

At the same time, global retirement systems are transitioning toward defined contribution pension strategies, leaving defined benefit (DB) plans to increasingly operate as legacy arrangements. Regulatory reforms are also sweeping across markets, often centralizing governance, accelerating consolidation or enabling pooled arrangements. For employers, this creates dual pressure: Maintain member outcomes while controlling costs and simplify the management of legacy DB plans as their importance reduces over time.

Against this backdrop, proactive endgame planning — or “the last mile” of the pension scheme as it is often referred to in the U.S. — is no longer optional but essential.

The UK and U.S. have led the way, with employers closing pension plans and systematically derisking their portfolios over the last decade. The attention now turns to countries that are only just beginning to enter the endgame phase.

Defining the Endgame: Evolving Strategies

Across the most mature DB pension markets, three endgame strategies are well-established:

  1. Buyout (Risk Transfer to Insurer): Serving as the most common strategy in mature markets, this involves transferring all DB liabilities to an insurer through a buy-in or full buyout. In the UK, 52% of schemes are aiming for buyout as soon as it becomes affordable, while in the U.S., 32%1 of plans cite full termination as their long-term goal.
  2. Long-Term Run-On (Hibernation): These schemes continue indefinitely with a focus on long-term stability and risk reduction. This approach is favored in markets with less-developed insurance solutions. Sixty percent of U.S. plans and 18% of UK schemes expect to remain in long-term run-on.
  3. Flexible Run-On: This takes a hybrid approach where there is a flexible “run-on” of operations — continuing to operate the scheme for a period while retaining the option to buy out when conditions are favorable (e.g., surplus usage or better pricing) — before a full buyout. Around 8% of U.S. plans and 22% of UK schemes pursue this approach.2

Regulation and local market infrastructure heavily influence these strategic choices. Many global sponsors are borrowing learnings from the U.S. and UK’s experience reducing pension risk, using tools like buyouts, lump sum options and annuities.

Pension Risk Priorities and Challenges

As DB schemes approach their endgame, the emphasis is on securing liabilities and ensuring member benefits are delivered without disruption. The most common risks include:

  • Investment Risk: Schemes remain exposed to market volatility, and many are shifting toward bonds, annuities and liability — matching strategies to lock in gains. In the UK, 42% of DB schemes plan to reduce allocations to illiquid growth assets in 2026, up from 35% in 2023. Across continental Europe, the majority had investment risk ranked as the highest priority.
  • Interest Rate and Inflation Risk: Fluctuations in rates can significantly impact liability valuations. Liability-driven investing remains a core strategy in many countries. In Spain, half of respondents from Aon’s 2025-2026 Global Pension Risk Survey adopt investment strategies that hedge between 61% and 80% of the risk of inflation.
  • Economic and Geopolitical Uncertainty: Macroeconomic instability can erode scheme funding. In Ireland, 45% of respondents expect negative funding impacts from economic and geopolitical events in the next one to two years.
  • Operational and Cyber Risk: While these risks remain important, they currently rank lower for many DB schemes. With administration widely outsourced across continental Europe and no material cyber incidents reported in the past two years, fewer than one in six sponsors/respondents view cyber as a top concern.

Global Trends in Pension Scheme Endgame Planning

  • 01
    Buyouts Accelerating Across Europe

    Countries are increasingly targeting buyouts as funding improves, including 60% of plan sponsors in the Netherlands and 32% in Ireland. Roughly a third of plan sponsors in Spain expect to transfer liabilities via deferred annuities.

  • 02
    Minimizing Risk Through Outsourcing

    In Germany, most schemes have already reduced risk by outsourcing obligations, administration or asset management. Similar trends are emerging in Ireland and the Netherlands.

  • 03
    Shift Toward Low-Risk Investment

    Ireland and Switzerland are focusing on long-term, low-risk strategies that support stability as plans mature and active memberships decline, with 45% and 29%, respectively, citing this approach.

Country-Specific Considerations: Choosing the Right Endgame Strategy

Selecting the right DB endgame strategy isn’t one-size-fits-all. Employers must weigh a range of factors, including regulatory frameworks, market maturity, funding capacity and available risk transfer options to determine the best path forward in each country.

Key considerations include:

  • 1. Regulatory Environment

    Local legislation can dictate or limit endgame options.

    • In the Netherlands, The Future Pensions Act mandates that all DB plans convert to flat-rate DC by 2028. This effectively sets a legal end-date for Dutch DB scheme, prompting many to merge into multi-employer funds.
    • Approximately 98.5% of the assets at Dutch pension funds that currently support DB pensions will be transferred into individual DC accounts. The remaining 1.5% of total assets will remain insured as DB through buyouts or are not yet decided.
    • France and Switzerland are innovating within existing structures, including flexible models and new mortality tables for pension reforms.
  • 2. Funding Status and Market Readiness

    One big reason endgames are on the table now is the markedly improved funding positions of DB schemes. After years of contributions and favorable markets (including rising interest rates that shrink DB liabilities), many plans find themselves at or above full funding.

    • In Ireland, over 98%3 of DB schemes now meet the regulatory funding standard, opening the door to derisking transactions and insurer engagement.
    • In Switzerland, funding positions continue to improve, with around 43% of DB plans now showing a funding position over 100%.
  • 3. Risk Transfer Infrastructure

    The availability of insurers or pooled options can shape the endgame path.

    • Where insurance markets are less developed, employers may favor run-on strategies.
    • Multinationals are increasingly considering cross-border solutions like United Pensions to address gaps in coverage and governance.
  • 4. Workforce and Plan Design

    The nature of the workforce (e.g., unionized, mobile, aging) and plan structure (e.g., open vs. closed, size of liabilities) also influence strategy.

    • Multinationals are increasingly developing global DB playbooks to benchmark each country’s plan status, assess local constraints and align endgame decisions with broader workforce and financial goals.
    • In Germany, measures for the DB plans — such as closing to new entrants, shifting to defined contribution arrangements and de risking through funding strategies — have often already been implemented.
  • 5. Surplus Management

    Surplus management is emerging as a strategic issue. Different markets show very different attitudes on how to handle an overfunded plan.

    • Switzerland and Ireland intend to use surplus to improve member benefits.
    • In the Netherlands, 60% would refund the employer or reduce future contributions.

Despite local differences, the most successful endgame strategies consistently feature strong governance, clarity of objectives and careful risk management — and the most successful sponsors are those who act early, assess their position honestly and remain flexible as conditions shift. Whether your goal is buyout, run-off or consolidation, proactive planning gives you options and helps avoid last-minute pressure.

“Sometimes the path to endgame is closer than clients think,” notes Ben Simon, Associate Partner, International Wealth at Aon. “A straightforward scorecard assessment often reveals opportunities to accelerate risk settlement or enhance endgame strategies across countries.”

32%

of schemes are planning buyouts in Ireland. That number is higher in the Netherlands, at 60%.

Source: Aon’s Global Pension Risk Survey 2025/26, UK Findings

We can help you understand the risks and drivers impacting your organization’s DB plans. Our DB Scorecard is a great starting point to learn the status quo, prioritize actions and formulate your endgame — wherever you are located. Contact us to get started.
Aon’s Thought Leaders
  • Harry Austin
    International Retirement Consultant, International Wealth
  • Callum Jones
    Senior Consultant, International Wealth
  • Ben Simon
    Associate Partner, International Wealth
  • Mark Tavares
    Partner, Corporate DB Solutions Leader, Wealth Solutions, North America

1 Aon’s 2025-26 Global Pension Risk Survey, U.S. Results
2 Aon’s 2025-26 Global Pension Risk Survey, UK Findings
3 Aon Wealth Symposium 2025: Session Highlights

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document. Aon plc is a large diversified professional services company, and such services are provided through indirect subsidiaries and affiliated entities. The information provided relates to Aon Investments USA Inc. (“Aon Investments”) and Aon Consulting, Inc. (“ACI”). Aon Investments is wholly owned by ACI, an indirect subsidiary of its ultimate parent, Aon plc. Investment advice and investment consulting services are provided by Aon Investments. Non-investment consulting services are provided by ACI.

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