Continued developments in endgame options as strong funding levels persist
This content is AI generated, click here to find out more about TransposeTM.
For terms of use click here.
Latest results by LCP’s Pensions Explorer at 28 February 2025 show that the combined IAS19 funding level for the UK pension schemes of FTSE100 companies remains strong at around 120% corresponding to a surplus of £60bn. As robust surplus levels continue and survive market volatility, endgame strategy and planning remain high on pension schemes’ agendas
Recent corporate announcements have showed there is continued appetite to use surplus within DB pension schemes for the benefit of all stakeholders. Where appropriate, additional protections can be provided by external parties that are offering new innovative capital backed solutions that can target a scheme’s chosen endgame strategy over preferred timeframes.
There has also been an exciting development in the bulk annuity market. Brookfield Wealth Solutions are the fourth new entrant to the market in 18 months and are set to begin operations later in March following final regulatory approval. The market now has the most insurers it ever has, bringing additional competition and favourable pricing.
Jonathan Griffith, Partner and Head of Endgame Innovation at LCP, commented:
“With ongoing market uncertainty, it’s pleasing to see that funding levels have remained strong. We are now seeing regular announcements on all aspects of endgame strategy – including on use of surplus and insurance transactions. After a period of “wait and see” where some schemes deferred decisions in light of 2023 Mansion House speech and DB options consultation - it’s clear that companies and trustees are now taking action and implementing decisive strategies.”
Nieran Deivamani, Associate Consultant, and part of the Endgame Innovation team at LCP, added:
“The continuation of DB schemes being in a surplus and the recent developments in innovative endgame solutions should translate to an increased flexibility for schemes when considering their endgame strategy whilst still providing appropriate protection to members benefits.”
