DB schemes urged to take ‘purposeful pause’ in endgame planning

Defined benefit (DB) pension schemes should take advantage of the sharp improvement in funding levels and consider the strategic value of a ‘purposeful pause’ in their endgame planning, Hymans Robertson has said.

In its latest paper, Excellence in Endgames: The value of taking a purposeful pause, the consultancy said that with 85 per cent of UK DB schemes now fully funded on a technical provisions basis, and over half estimated to be able to afford full insurance, many schemes are further ahead than expected.

However, the firm warned that this progress carries the risk of schemes rushing into decisions and potentially missing opportunities.

Given this, it suggested that trustees and sponsors could benefit from pausing to reassess objectives, align stakeholders, and prepare for a smoother journey to their chosen destination.

Hymans Robertson partner and head of DB scheme actuary services, Laura McLaren, said the shift in funding levels has opened up new choices, but cautioned against “locking in decisions prematurely”.

She also stressed that pausing was not about stalling progress but about ensuring schemes “head in the right direction” and take time to weigh up the implications for members and employers.

With this in mind, the firm highlighted several areas where schemes could benefit from a pause, including exploring the expanding range of endgame options, managing illiquid assets, addressing data quality and benefit discrepancies, and considering how upcoming regulatory and market changes could reshape strategic choices.

Indeed, McLaren noted that more trustees were already stepping back to reconsider their long-term goals.

“Taking a short pause allows schemes to align stakeholders, clarify objectives and prepare operationally, which ultimately smooths the journey to endgame,” she explained.

According to McLaren, a measured approach can also help avoid unintended consequences.

“Rushing may mean missing out on value for members or sponsors,” she claimed.

“By preparing thoroughly and keeping flexibility on the table, schemes can make confident, well-considered choices that reflect their unique circumstances.”

Hymans Robertson concluded that DB schemes are no longer restricted to a binary choice between buyout or run-on.

Those who take a purposeful pause, the firm argued, will be best placed to secure both member outcomes and sponsor value in an evolving endgame landscape.



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