Industry Voice: How member options can help schemes reach their endgame

Bulk exercises and member journey plans are increasingly being used, according to research from Aon and Professional Pensions

clock • 1 min read
Industry Voice: How member options can help schemes reach their endgame

The Pensions Regulator is putting greater emphasis on DB schemes to be certain of their endgame planning.

In its provisional revamped DB scheme funding code, The Pensions Regulator wants schemes to set a long-term objective, encompassing its funding and investment strategy and with the aim of reaching a "position of low dependency" on their sponsors. For many closed DB schemes, this expected to involve an end game - transfer to an insurer, or another route to removing the scheme from the sponsor's balance sheet and securing member benefits.

We asked more than 100 schemes whether they see member options as being a key part of the journey to reaching their end game. Some 31% confirmed it was a key part of their strategy, with a further 52% indicating they had not yet dismissed this opportunity.

What's in the toolbox?

Many trustees and sponsors find providing member options to be a useful tool to accelerate the time to reach buyout.  

Bulk exercises can be used to simplify schemes and liability can be discharged at a much lower cost than securing the benefits with an insurer.

Furthermore, given that the options available to members and support to understand those options may change irrevocably after buyout, trustees see the importance of fully communicating with members about their options ahead of buyout as being part of good governance.

Schemes are increasingly developing formal "member journey plans" to document the plans for their members' experience alongside funding and investment plans ahead of buyout.

Click to access your exclusive research report and learn more about the options available to give scheme members more choice

This article was funded by AON


More on Investment

SIF 2022: One week left to register!

SIF 2022: One week left to register!

The Sustainable Investment Festival will take place next Monday and Tuesday

Professional Pensions
clock 04 July 2022 • 3 min read
Richard Butcher: Getting good stewardship to work consistently throughout the investment chain is really difficult

PLSA and IA steering group issues stewardship proposals

Set of recommendations aims to bolster relationship between managers and schemes

Jonathan Stapleton
clock 30 June 2022 • 3 min read
Industry Voice: Navigating uncertainty through trade finance

Industry Voice: Navigating uncertainty through trade finance

Allianz Global Investors
clock 30 June 2022 • 4 min read