Most DB pension sponsors review long-term strategy as buyout falls out of favour – IGG
Two-thirds said they had already looked at their long-term strategy as funding improved, while a further 27% said they are currently carrying out a review.
More than nine in 10 UK defined benefit (DB) pension scheme sponsors have either reviewed or are reviewing their long-term pension strategy, according to research from Independent Governance Group (IGG).
Two-thirds said they had already looked at their long-term strategy as funding improved, while a further 27% said they are currently carrying out a review.
Just 10% of sponsors plan to buy out with an insurer as soon as practical.
More are considering running their scheme on, using captives, capital-backed solutions, consolidators, superfunds or alternative risk-transfer options.
Around 5% of sponsors remain undecided about the best route.
Hatty Goodwin, trustee director and head of risk transfer at IGG, said: “As funding conditions have improved, sponsors and trustees have more credible options available to them and are rightly testing the market to find which best fits their scheme, their obligations and their objectives.
“But the debate should not be framed as simply buyout versus run-on.
“The focus is now also on timeframe. Run-on strategies can be used in the short, medium and long term to achieve better outcomes for members and sponsors.”
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