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UK DB schemes keep endgame options open amid regulatory shifts

New research from mallowstreet, commissioned by Brightwell, reveals UK DB schemes are continuing to keep their options open regarding endgame strategies – despite improved funding levels and the introduction of a new DB funding code.

The Endgame & Priorities Report 2025, which surveyed 21 UK DB schemes with over £1bn of AUM and combined assets exceeding £290 billion, highlights the significant impact of regulatory uncertainty on scheme decision-making — particularly around surplus extraction rules. With new government proposals allowing surplus extraction under trustee-employer agreements, many schemes are reassessing their long-term strategies.

The research found that 81% of DB schemes have revisited their endgame plans in the last one or two years.

Over a third (38%) plan to run on, 24% plan to buy out and 38% have not yet decided on their endgame.

Half of undecided schemes and 40% of those targeting buy-out would consider run-on if the government makes it more attractive.

To support schemes that are thinking about running on, Brightwell has developed a run-on toolkit which can be found here. It helps schemes considers what a run-on might look like and how to achieve it.

Other themes emerging from the report include:

• Surplus rules may shift endgame strategies: 86% of schemes believe the government should ease surplus access, and 62% say changes would encourage them to run-on rather than pursue buy-out.
• A flexible approach to growth and risk: 62% of schemes targeting run-on are increasing allocations to growth assets while maintaining liability-driven investment (LDI) and longevity protection.
• Evolving governance and cybersecurity needs: over half of all schemes cite cybersecurity as a major concern irrespective of their endgame plans alongside persistent challenges around regulatory compliance.

Morten Nilsson, CEO, Brightwell, said: “Changes to surplus extraction rules are giving larger DB schemes pause for thought introducing new incentives for trustees and sponsors to run schemes on.

“Running on comes with its own rewards and risks and our new toolkit outlines the key considerations for pension schemes and the tools needed to run-on successfully.”

Ally Georgieva, Head of Insight, mallowstreet, said: “Run-on will enable more schemes to increase allocations to growth assets and accommodate less liquid investments without wholly re-risking. This would support the government’s ambition to encourage investments in productive assets, and the pensions industry looks forward to further announcements.”