UK defined benefit (DB) pension schemes are increasingly focused on their endgame planning, with the options for most being an insurance transaction or run-on.
The events since September 2022 have resulted in significantly improved funding positions for many UK DB pension schemes. As a result, many pension scheme trustees and their corporate sponsors are faced with an ‘endgame’ decision that would previously have seemed years away. An increasing number of schemes are looking to insure and buyout in the near term as a way to settle the liabilities of the scheme once and for all. At the same time, the Government has been progressing a series of changes to the pension regime that aim to make it more attractive for schemes to invest for a surplus over the long term. By doing so, they are creating a new and expanded opportunity set for pension scheme run-on strategies.
The question for trustees and sponsors now is whether you look to secure your scheme’s liabilities with an insurer or consolidator, or should you continue to run-on for the foreseeable future?
Choosing the best strategy can prove challenging but we are here to help.
Understanding your options
Insurance Transactions
Further Information on our Risk Settlement services can be seen here.
Running On
Further information on Aon’s Solution to Run-on (ASTRO) can be seen here.