Out of the woods?
The UK’s Defined Benefit (DB) pensions sector stands at an inflection point. While only 4% of schemes are open to new members, DB will continue to be an important part of the pensions landscape for some time to come. In 2036, PPF projections suggest that there will still be £880 billion of AUM in DB schemes.
Our qualitative research with 14 of the UK’s largest DB schemes covering ca. 698, 500 members and ca. £224 billion AUM offers an important window into how trustees, executives and sponsors are thinking today and their priorities, pressures and aspirations for the decade ahead.
For many schemes, after years focussed on repairing deficits, the majority are now operating from a position of relative strength yet are faced with a new set of strategic decisions that will shape the future of member outcomes.
Trustees and sponsors are bound by a sense of duty to members and remain deeply committed to delivering secure and reliable pensions. This means paying the right pension to the right person at the right time, and providing a high-quality member experience that is fair, empathetic and resilient.
Yet, they also face a complex landscape marked by fragmentation, cost duplication, conflicts of interest and a growing expectation, both regulatory and societal, in order to demonstrate long-term value. This is where we need to act on rationalising costs and ensuring enabling regulation that helps to support schemes that want to run on rather than buy out.
At Brightwell, we work in partnership with some of the UK’s largest and most mature DB schemes, supporting them to deliver on the promises made to millions of members. As a steward of long-term DB pension promises, Brightwell is committed to supporting this evolution. We hope this report helps stimulate practical, informed discussion about the future of DB pensions and the opportunities ahead for schemes, sponsors and members.
Morten Nilsson, CEO, Brightwell
The defined benefit pension schemes landscape: balancing duty, fragmentation and stability.
The sector is united by a sense of duty to their members and to deliver on their scheme’s pension promise.
This sense of duty is shared by trustees and sponsors alike, and spans three key areas.
1. Ensuring certainty by paying members the right amount and on time
2. Delivering a quality experience
3. Supporting members through important life events
