A lot has been written about how to achieve good outcomes for members of defined benefit (DB) pension schemes. A strong employer covenant, well-managed investments...
Read article “Good administration, the backbone of pensions”5 minutes
The Endgame Strategy & Priorities Report 2024 surveyed 27 UK DB schemes larger than £1bn in January 2024 gathering perspectives on a total of £300bn in assets under management.
The research found that 41% are schemes are undecided about their endgame, 33% are targeting buyout while 26% are aiming for run off.
For schemes over £5bn, 54% are undecided, 23% are planning to buyout while 23% plan to run off.
Additionally, 42% of schemes say that a high allocation to illiquid assets presents a barrier to their endgame. Lack of agreement with the sponsor is also a barrier for 25%.
Of the schemes that intend to run off, 86% say they’ve taken this decision due to the strength of their covenant. Over half (57%) do not wish to transfer value to insurers. Other concerns include loss of control (29%) and loss of discretionary benefits (14%).
More than half of schemes (57%) report that their surplus currently cannot be returned except on wind-up, whilst 22% don’t know. Only one in 10 (11%) currently have the ability to access surplus.
The report also questioned schemes about their biggest concerns for the next three to five years.
Cyber-security was cited as the top concern for 48% of schemes. This is closely followed by the growing regulatory and reporting burden, cited by 44%.
“With so much change, it’s not surprising that DB schemes are taking a ‘wait and see’ approach to their endgames.“
“The past 18 months witnessed the first superfund transaction, as well as a range of new governance and fiduciary management solutions. While the industry mulls over the role of growth assets in the Mansion House reforms and productive finance agenda, endgame options are diversifying. As such, it is probably wise to remain open-minded.“
“When it comes to buyout, it seems that many are beginning to question whether it remains the ‘gold standard’ or whether they risk ‘selling the family silver’ instead.“
Head of Communications and External Relations
Selecting the right CDI strategy is key to the journey plan - whether that be run-on, buyout or maintaining medium term optionality. Read our new paper on the benefits of combining LDI and CDI management here.
Find out more about “Have your cake and eat it: Optimising value with combined LDI and CDI management”03/07/2024
Brightwell has today published its first Sustainability and TCFD report for the year ending 31 December 2023. Sustainability is a core component of the Brightwell ethos. It is fundamental to the way we operate, and we’re pleased to share this report.
Find out more about “Brightwell publishes its Sustainability and TCFD report for 2023”28/06/2024
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