Defined benefit (DB) pension schemes have transferred over £400bn of assets to insurers via buy-in transactions over the past two decades, LCP analysis has revealed.

LCP said the figure highlighted the scale of the buy-in market, noting that UK DB schemes currently hold around £1.1trn in assets.

The consultancy noted this month marked 20 years since the first modern buy-in, which allowed schemes to treat a buy-in as an investment without immediately moving to a full buyout.

Looking ahead, LCP argued the pension risk transfer market could look very different now there are a wider range of endgame options to consider, and schemes’ endgame decisions could have implications for members, sponsoring employers and the wider economy.

LCP said policymakers, regulators and the industry should support the development of a range of credible endgame options.

It highlighted the need for clear, stable and proportionate frameworks across insurance, superfund, run-on approaches, and future innovations.

The consultancy also pointed to the importance of continued competition, investment and access to solutions for schemes of all sizes, while maintaining member protections and considering the wider benefits for employers and the UK economy.

Commenting on the milestone, LCP’s pension risk transfer team partner, Charlie Finch, said: “The modern buy-in has transformed the UK DB pension landscape since its introduction 20 years ago. The next chapter should build on that success and support a range of credible and successful endgame options.”

He added that while buy-ins will remain the right option for many schemes, the wider range of endgame options now available means trustees and sponsors face important choices.

“This needs to be supported by clear, proportionate regulatory frameworks that enable the development of commercially viable propositions and continued innovation while maintaining appropriate safeguards for members,” he said.

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