Defined benefit pension schemes are experiencing significant change. Insurance solutions such as buy-in and buy-out are now within reach for many schemes, while new endgame options continue to emerge.
A growing number of sponsors and trustees are also choosing to run their schemes on to create value for members and the business. Our defined benefit consulting team helps you understand your options and choose the right path for your scheme.
We help trustees and sponsors navigate complex decisions, reduce risk and secure members’ benefits. Strong, lasting partnerships matter to us, because the decisions you make have real consequences for real people. We stay with you for the whole journey, until the very last pension is secured.
We advise more than 350 pension schemes. Our team includes over 400 actuarial and investment specialists and more than 100 digital and modelling experts.
Defined benefit (DB) consulting is specialist advice that helps trustees and sponsoring employers manage their pension scheme and make informed decisions throughout its lifecycle. It covers areas such as funding, investment, governance, administration and endgame planning. Effective DB consulting brings these strands together into a clear, joined-up strategy that helps schemes meet their objectives and deliver good member outcomes.
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For those managing DB pension schemes, it's a pivotal and exciting time. With a dynamic risk transfer market and new provider solutions, endgame planning is complex. It's not just about buy-out versus run-off; factors like scheme size and stakeholder beliefs play crucial roles. Careful consideration is key to navigating this diverse landscape.
Whether you are a trustee or an employer of a DB scheme, our 'Excellence in Endgames' hub is here to help you cut through the complexity, identify the right endgame strategy for your individual scheme and develop and execute a strategy that puts member outcomes at its heart.
If your defined benefit (DB) pension scheme is targeting buy-out, you need a cohesive strategy and plan to get there. And you need them sooner rather than later.
To help you deliver a successful buy-out strategy, we’ve developed PACE. Using a strategic approach to buy-out, PACE integrates affordability, investment and due diligence considerations to create a clear pathway for your scheme.
The main routes are securing benefits with an insurer through buy-in and buy-out, using alternative risk transfer solutions, transferring to a consolidator, or running the scheme on for a period to generate surplus. The right choice depends on factors such as scheme size, funding level, the strength of the sponsor and the priorities of trustees and the employer. There is no single answer that suits every scheme.
With a buy-in, the trustees buy an insurance policy as an investment of the scheme. The scheme continues and remains responsible for paying members, while the policy covers some or all of the benefits. With a buy-out, the insurer takes on full responsibility and members become policyholders of the insurer. A buy-out is usually the step before a scheme winds up.
Running on means keeping the scheme going rather than transferring it to an insurer straight away. A well-funded scheme can aim to generate a surplus over time, which may be used to benefit members, support the sponsoring employer, or both. It’s increasingly seen as a credible alternative to buy-out for some schemes.
Consolidation brings schemes together, or moves a scheme into a larger arrangement, to gain scale, share costs and improve governance. It can be an option for schemes where a full insurance buy-out is not the immediate goal.
Readiness usually comes down to funding level, the quality and completeness of member data, the investment strategy, and how prepared the scheme is for insurer due diligence. Schemes that address data and strategy early tend to reach buy-out more smoothly and on better terms. A structured plan helps bring these elements together.
Almost every major scheme decision, from funding to risk transfer, relies on accurate member data. Poor data can delay transactions, increase costs and create uncertainty over the true value of a scheme’s liabilities. Getting data right early gives trustees and sponsors the confidence to make decisions, and can reduce ongoing running costs as more automation is possible.
We work with trustees and sponsoring employers of UK defined benefit schemes of all sizes, from those running schemes on to those approaching their final wind-up.
No matter where you are on your scheme’s journey, we can guide you to the solution which best meets your needs and delivers.
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Join us for our annual risk transfer conference taking place 3 November at 30 Euston Square.
Together, we’ll explore key topics including the implications of pension policy for corporates, the challenge of improving retirement adequacy, and what DB pensions mean in today’s environment. We’ll also look at how organisations can move from strategy to action, and what may be getting in the way.
Pension scheme endgame planning: practical guidance for trustees and sponsors on liquidity, risk, governance and investment strategy.
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