Marvin OnumonuTrustees of defined benefit (DB) pension schemes are pushing ahead with planning for buy-in and buy-out deals, according to research from Standard Life.
Nearly a fifth (17%) of schemes said they faced no barriers to execution.
Among 100 trustees managing schemes with assets of £100m or more, a third (33%) said market volatility was their biggest challenge.
The same number (31%) highlighted issues with illiquid assets and data quality.
Trustees reported using secondary market sales, sponsor loans and deferred premiums to deal with illiquid assets and prepare portfolios.
Data problems were still a concern for nearly a third (31%) of trustees, but 83% have either finished or started data cleansing, and one in eight (13%) plan to do so.
Claire Altman, managing director – BPA & individual retirement at Standard Life, said: “While the industry debate around the option of DB scheme run-on and surplus extraction continues to attract attention, our research shows that trustees remain focused and are demonstrating growing confidence as they move closer to their endgame goals.
“While challenges such as market volatility and illiquid assets remain, many schemes are increasingly well-prepared to manage them.
“We’re seeing a more strategic and collaborative approach, with trustees strengthening governance, refining investment strategies, and engaging with advisers and insurers earlier in the process.
“This growing preparedness is translating into steady, tangible progress across the market.”
Nearly a third (29%) of trustees said funding levels were still a concern. More than a quarter (27%) mentioned general preparedness as a barrier.
9% expected funding positions to improve or stay the same over the next year.
Nearly half of schemes are aiming for a buy-in or buy-out as their endgame, with more than two-thirds (70%) planning to approach an insurer within three years and two-fifths (40%) looking to do so within twelve months.
Altman added: “Schemes that act early and take advantage of their current funding strength will be in the best position to move decisively when market conditions align.
“Acting from a position of readiness enables trustees to move quickly and confidently when the time is right.
“The market is evolving rapidly, and well-prepared schemes are now shaping its direction.”
She said: “Those that plan early, stay engaged, and act decisively will be best placed to complete their endgame journey and deliver long-term security for their members.”
