The number of defined benefit pension schemes closed to future accrual continues to grow as trustees and companies’ focuses turn to endgame, Barnett Waddingham has said.

Its latest survey of UK DB schemes with assets over £1bn found that 52 per cent of schemes remain open to future accrual, compared to 57 per cent this time last year, and only 3 per cent are open to new savers.

Barnett Waddingham claimed that the continued closure and ageing membership of DB schemes, as well as encouragement from The Pensions Regulator, will be turning the attention of trustees and companies towards the endgame process.

The study also found that 95 per cent of schemes saw an increase in transfer value payments, while one third of schemes experienced an increase of 200 per cent or more.

This is significantly more than the 7 per cent of schemes that saw a threefold increase last year, and suggests that there was an increase in the number of schemes taking actions focused on reducing balance sheet risk and cost as they moved towards endgame.

Commenting on the survey, Barnett Waddingham partner, Andrew Vaughan, said: “Companies have clearly decided that the future of pension provision lies away from DB pensions, but what does that actually mean for those companies managing a legacy DB pension scheme?

“The focus of companies should now be shifting to the endgame for their DB pension scheme - defining an achievable target and a clear strategy for how they are going to get there successfully.”

Barnet Waddingham’s research also revealed that there was a 7 per cent drop in assets allocated to equities in comparison to last year and the average funding level reached 100 per cent for the first time.

Vaughan concluded: “The UK’s largest schemes will again be leading the way in developing innovative strategies to manage the final chapters of DB pension provision, with the smaller schemes following suit.

“Efficient risk management of DB schemes over their remaining lifetime will now be the primary objective for companies – a stark contrast from the original purpose of operating a DB scheme.”

This is Barnett Waddingham’s seventh annual survey of private sector DB schemes in the UK with assets of over £1bn. It is based on publicly available data up to 30 September 2018 and focuses on scheme type, asset allocation, investment performance, deficit contributions, and adviser fees. The survey covers over 250 schemes.

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