Hymans Robertson unveils the ‘Excellence in Endgames’ insights hub, designed to help sponsors and trustees of defined benefit pension schemes navigate the various options.
It includes a decision-making tree that helps identify the best Plan A endgame and highlights options such as managed run-off, alternative risk transfer, and superfunds that may be viable Plan A options for certain schemes.
Hymans highlights how important it is to have a dynamic endgames strategy which considers an actionable Plan B, pointing out how many schemes don’t have one. The decision-making tree is intended to simplify complex situations, pinpoint the best course of action for a scheme, and assist in creating and carrying out a strategy that prioritises member outcomes.
Hymans Robertson head of pension policy innovation Calum Cooper says: “A highly energised risk transfer market and the emergence of new provider solutions means DB schemes have a lot to think about when it comes to endgame planning. So, a dynamic endgames plan that can handle alternative futures is a must for DB schemes. It’s not just a case of buy-out vs run-off. There are many flavours of both DB endgame and run-off, and therefore many different factors to consider – from scheme size to stakeholder beliefs.
“Endgames is plural because no set plan survives first contact with markets. The ability to adapt and even to pivot to Plan B, if needed, will improve outcomes. So that’s why we’ve created our ‘Excellence in Endgames’ hub and decision-making tree to help schemes deliver better, balanced outcomes in the face of uncertainty. Schemes can thrive by having two possible endgames: a Plan A for core strategy and a complementary Plan B to which it can pivot in case of adversity. The questions in the decision-making tree help schemes identify a Plan A with further guidance for developing a Plan B.
“After decades of dealing with deficits, The Pensions Regulator estimates that the average scheme is now fully solvency funded, meaning risk transfer could be viable in a relatively short time frame. But preparing for risk transfer and ultimate buy-out is a long and expensive process. Making an informed decision at the outset of that programme of activity is vital.
“The way ahead may feel like a maze, but our insights hub will help schemes find the right routes through it.”