The value of running on your DB pension scheme

It is certainly undeniable that UK DB pension schemes have significant economic value to offer, with total assets under management of well over £1 trillion and the Pensions Regulator (TPR) now estimating a total surplus in excess of £225bn on a low dependency basis. The only question is, who stands to benefit from this economic value?

Running on your scheme

At present, the answer to this question tends to be insurers. Buyout is seen as the “gold standard” for most schemes with the scheme surplus funding insurer capital requirements, expenses and profit margins. However, the last 18 months have seen material developments in the DB pensions market that have highlighted the potential for this economic value to be shared with employers and members by running on the scheme instead.

In our latest Investment Insights briefing, Chris Pritchard and Matt Tickle explore the benefits a run-on scheme could hold for sponsoring employers and their members, detailing the opportunities and risks involved, as well as mapping out some of the practicalities for schemes looking into this alternative to buyout.