In this report, we explore the current emerging trends affecting defined benefit schemes in the UK and how pension scheme decision-makers feel about these developments.
During November 2024, WTW asked employers and trustees for their views on their defined benefit (DB) pension schemes' long-term strategy, for settlement and de-risking, and their views on the current direction of pension policy.
Some of the key findings are:
- 'GMP equalisation' is the top short-term priority. Preparing for pensions dashboards implementation has emerged as a key short-term priority for the next year.
- Journey planning is a main priority for DB strategy. Companies are split between buyout and run-off objectives.
- Among those targeting buyout, most are looking to settle liabilities within the next five years. The main driver for running off the scheme is to generate surplus.
- Schemes are selling illiquid assets and increasing their holding of corporate bonds.
- Nearly 1 in 5 schemes expect to require additional support from the sponsor to reach their low-dependency funding target.
- A large majority believe regulation should focus more on achieving better outcomes for members and making it easier to return surplus.
We would like to thank you for participating in the survey. Please download the survey slides for more details on the survey findings, or for more information please contact your WTW consultant.
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Emerging Trends in Defined Benefit Pensions Survey 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
