The combined IAS19 pension surplus for FTSE100 UK pension schemes rose to around £65bn from £60bn as of 31st October 2024, according to LCP’s Pensions Explorer.
LCP says this funding position and market conditions influence when sponsors and trustees look for insurance deals. Because of the recent budget’s higher employment costs, sponsors might consider ways to improve cash flow for themselves and their members, reassess pension spending, and minimise costs.
According to LCP’s October 2024 Pension Risk Transfer study, scheme endgame options are becoming more complex than choosing between buy-out and run-on. Plans are adjusting to balancing risks and opportunities in response to shifts in the market, financial status, and economic conditions.
LCP partner and head of endgame innovation Jonathan Griffith says: “Endgame planning is not a rigid once and done. As circumstances have changed and funding positions improved, we have seen schemes adapt and take a more nimble approach to their endgame. Whilst the insurance market remains busy, this shift in approach and mindset has led to a number of schemes implementing robust strategies delivering real value.”
LCP consultant, and part of the Endgame team Aaron Chaderton says: “Seeing the first wave of schemes in the current environment implementing run-on and gaining actual value shows that the vast amount of discussion on alternative endgames can be realised in practice. It’s really exciting to see how similar flexible run-on frameworks can used for other schemes, corporates and members.”
