A New Era of Optionality: The Future of UK Defined Benefit Endgame Strategy

The UK defined benefit pensions market is entering a new era of choice, but greater optionality is not yet translating into automatic adoption of alternative solutions.

To explore this shift in more detail, FTI Consulting convened a panel of leading industry experts from across pensions advisory, investment consulting, legal, superfunds, and scheme management to debate the future outlook for DB schemes.

Our subsequent report, A New Era of Optionality: The Future of UK Defined Benefit Endgame Strategy, reveals that trust and reputation, not product viability, are emerging as the key factors shaping endgame decision-making.

For less established routes such as capital-backed journey plans, superfunds or even surplus extraction within run-on, the need for social proof was the biggest identified barrier to growth. Cautious by nature, many trustees are reluctant to be first movers. Education around new structures, who they are suitable for, what they can deliver for members — coupled with clear communication around early transactions — will be crucial to building the necessary social proof and trustee confidence to move these structures further into the mainstream.

For the bulk annuity market , as this continues to mature and pricing becomes less of a distinguishing feature, insurers will need to demonstrate value across a wider range of areas. For schemes, this increased competition is creating opportunities to assess providers not only on cost, but on the overall quality of outcomes they can deliver for members over the long term.

Regardless of route, the conclusion from our discussion was clear – in a market which is now defined by choice, reputation is the ultimate currency. Those who can demonstrate credible track records, invest in the necessary education and awareness building, and align their offering to what trustees and sponsors genuinely value for their members’ futures, will be best placed to capture the significant opportunity the market represents.

Thank you to all of our contributors:

• Chris Threadgold, Manager, Unit X at Brightwell
• Matt Wilmington, Chief Transactions Officer at Clara Pensions
• Mathias Rasmussen, Managing Director, Investment Consulting at Gallagher
• Henry Corrigan, Senior Associate at Mayer Brown
• Patrick Lloyd, Risk Transfer Adviser at XPS Group
• Nirmalee Wanduragala, FTI Consulting
• Marc Loh, FTI Consulting