Increased innovation from insurers is expected to lead to the faster wind up of DB pensions schemes following risk transfer transactions, according to a paper published by consultancy Hymans Robertson.
The report argues that innovations such as insurer led data and GMP equalisation, investment in digital capabilities and improved processes are decreasing the time of the post transaction phase of DB scheme buy-out journeys, with the potential to solve the issue of delays to winding up schemes.
A Hymans Robertson survey showed that 75 per cent of DB wind-up projects suffered delays, leading to uncertainty and increased costs for the sponsor. By taking advantage of the increasing insurer-led innovations, more schemes may be able to reach buy-out faster, giving more certainty on cost and timelines.
Hymans Robertson also called on trustees to review their wind-up strategy to ensure they are taking advantage of these ongoing innovations for the benefit of their scheme members.
Joanne Gyte, a partner at Hymans Robertson, says: “Trustees and sponsors are beginning to recognise that a good transaction is no longer just about securing a deal at the right price, but also getting through the subsequent phases quickly, predictably and without costly delays. Without a clear and aligned approach to delivery, DB schemes risk delays that can increase costs, create uncertainty and impact member experience. It’s encouraging to see the market responding to this.
“Insurers are starting to take a more active role in addressing the practical challenges that have historically slowed progress.”
The bulk annuity market has matured rapidly in recent years, with 2025 seeing the most buyouts ever completed. An estimated further 500 schemes are also in the post-transaction phase working towards a buy-out.
