UK pension schemes are increasingly focused on their ultimate destination — be that self-sufficiency, consolidation or buyout. A key action when agreeing the target is for the trustees and sponsor to jointly establish a detailed strategy for their overall journey, ensuring all steps are completed in a co-ordinated, efficient and cost-effective way and, crucially, avoiding the risk of missing beneficial opportunities which will arise en route.
Aon's Risk Settlement Survey 2021
We surveyed the UK pensions market to explore where schemes are placed along their journey to their endgame and to identify the opportunities that can increase certainty and reduce the cost of reaching the endgame.
This report summarises over 120 responses received from pension scheme trustees and sponsors of schemes of all sizes, alongside insight and views from Aon’s Risk Settlement experts.
The survey results are split into five sections each covering a key workstream as part of a scheme’s journey:
- Transaction considerations and governance
- Member experience
- Asset preparation
Pension scheme funding positions are improving, resulting in a trend of strengthening of endgame targets
Trustees and sponsors are likely to reach their long-term objectives sooner than expected
Preparing a strategic plan up front will deliver a smoother, more efficient and cost-effective journey, avoiding the risk of missed opportunities along the way
Support for at-retirement decision making is widespread but there are untapped opportunities to deliver greater flexibility to members, while simultaneously reducing liabilities
Phased buy-ins will be used as a risk management tool by many pension schemes, with the majority understanding the resulting impact on their investment strategy
Data and benefits are cleansed and well understood by only a third of pension schemes, demonstrating that further work is required by most to become ‘transaction ready’
Aon’s Journey to Settlement service allows trustees and companies to establish a joined-up strategy and document a formal plan of actions over the coming years. By co-ordinating the multiple workstreams, we target a smooth and stable journey to your endgame giving improved outcomes to trustees, sponsors and crucially your members.
We would be happy to discuss the survey results with you and put them into context for your trustee board or sponsor. We also hope they help you understand the positive actions that you can take to make your journey a success for the trustees, the sponsor and the pension scheme members.