UK defined benefit (DB) pension schemes are encouraged to evaluate the various final options available as the market evolves, professional services firm Aon, which provides risk, retirement and health solutions, said.
The company said the DB program will move into 2026 and bring with it a wider range of potential ending approaches. As more and more schemes emerge from the deficit, trustees and sponsoring employers are considering a wider mix of strategies when deciding how best to ensure the long-term interests of members.
While traditional options such as a buyout or continuing to operate the program remain important, Aon said the range of alternatives between those outcomes has expanded, which could complicate the decision-making process.
James Patten, partner in Aon’s UK endgame strategy team, commented: “UK DB schemes are now facing an increasing number of endgame solutions. Until recently, allowing the scheme to continue running or moving to acquisition was considered by some to be a binary choice for many schemes. While Aon’s Global Pension Risk Survey 2025/26 shows these options remain popular, with 52% of respondents intending to buy out and 18% intending to run long-term, it is now clear that there is a shadow between them.
“For example, our survey shows that 22% of respondents are interested in a flexible continuous buying approach, potentially with short-term continuous buying before buying (sometimes to reduce illiquid assets), or phased buying over a longer period. We see many large schemes continuing to adopt this approach in 2025.”
Patten said the current plan had a wider range of options, reflecting different priorities and funding situations. New market entrants could also expand the range of options available, he added.
“Schemes are now faced with a variety of end solutions. We are seeing a variety of ongoing strategies, depending on scheme priorities. We also expect to see more super funds seeking to enter the market in the short term, potentially delivering different benefit outcomes for members. The Department for Work and Pensions has expressed its commitment to enabling this market to thrive, with its gateway principles to be streamlined from 2028.”
Patten also noted that recent deals could impact how plans consider how they will be structured going forward. “In addition, the recent Stagecoach Aberdeen deal may pave the way for similarly structured transactions involving a change of scheme sponsor. Beyond this, pension self-insurance can also be particularly effective in certain circumstances.
“Of course, this greater variety of available solutions is welcome, but it does not make the decision any easier for trustees and sponsoring employers. They recognize that the final decision creates a decisive legacy for both scheme members and sponsors – and once a decision is made, it becomes all the more important to avoid feelings of ‘buyer’s remorse’.
“Plans need to ensure they fully consider all options, stay informed of the latest market developments when doing so, and ensure there is a clear audit trail of decisions made.
“Trustees and sponsors can remove some of the complexity and ensure better decisions are made by taking a step back to review their underlying objectives. They can then collaborate to develop their preferred strategy, fully weighing the options before focusing on the most important implementations.”
According to Aon, its UK endgame strategy team has advised more than 100 pension scheme sponsors and trustees on endgame decisions. The company said it will continue to invest in its discovery, development and delivery framework to support initiatives throughout, taking into account recent market developments and guidance from the Pensions Regulator in June 2025.
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