Insurance buyout remains the most popular destination for defined benefit (DB) pension schemes, despite growing interest in running on DB schemes and generating surplus for the benefit of members, research from XPS Pensions Group has revealed.

The poll found that insurance buyout was the preferred designation for over half (53 per cent) of respondents, while 3 per cent thought that superfunds were the right endgame for their scheme, while 17 per cent were undecided.

However just over a quarter (27 per cent) of pension scheme trustees and sponsors think that running their scheme on to generate extra surplus was either the right strategy now or would be the right strategy if the government regulated to give more flexibility on surplus to employers and trustees.

A growing interest in productive assets was also revealed, as a second poll also found more than two thirds (69 per cent) of pension scheme trustees and sponsors think that DB schemes have a role to play in investing more in productive finance (such as private equity, infrastructure and start-ups).

However, just over a third (36 per cent) of respondents think this should be confined only to schemes that were open to new members and 33 per cent think this should apply more generally.

The remaining 31 per cent of respondents thought that this should not be the case at all.

Commenting on the findings, XPS Pensions Group partner, Wayne Segers, stated: “While buyout will ultimately be right for many schemes, our poll reflects the growing interest we are seeing in running on and generating surplus for the benefit of DB members, employees’ DC savings and employers’ UK businesses.

“The poll results show a clear desire for support from government in doing this. In response to the government’s Mansion House consultations, we have set out a pragmatic proposal which would improve outcomes for scheme members and drive UK growth.”

Share Story: