Third of schemes plan to run on
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A third of defined benefit schemes plan to run on indefinitely, a new survey by the Pensions Management Institute and Schroders suggests, and nearly a fifth will run on for a period to generate surplus, as high funding levels continue to widen schemes' options.
While 45% of 41 survey respondents are targeting buy-in or buyout within 10 years, 33% expect to run on indefinitely and a further 18% plan a limited period of run-on to generate surplus before insurance, the PMI and Schroders UK Pension Scheme Survey 2026 has found. Just 5% said they will go down the DB consolidator route, according to the report published today.
The high percentage of schemes preferring to run on is linked to continuing high funding levels. The research notes that 68% of respondents saw their technical provisions funding improve, while 75% reported stronger funding on a buyout basis.
“Better funding is giving schemes greater choice, and this research shows there is no single destination. Some will move towards buyout, others will run on. That is not indecision, but a reflection of a diverse market where good strategy must be scheme specific," said PMI president Girish Menezes, who launched the survey at the PMI’s Endgame Solutions Conference on Tuesday.
“The important test is whether those choices are informed, evidence-led and well governed, with trustees equipped with the knowledge and confidence to exercise sound judgement," he said.
Ajeet Manjrekar, head of solutions at Schroders, said greater choice also brings more complex decisions, with success depending on aligning investment strategy and having the appropriate governance framework in place.
"The next phase of the endgame is not simply about funding levels, but about having the discipline and expertise to turn stronger positions into better member outcomes,” he said.
As schemes near their endgame, liquidity and liability matching come to the fore, requiring trustee capability, professional support and cyber resilience.
Half (52%) of respondents said liquidity will become a higher priority in investment decision-making over the next 12 months, while a third expect to reduce equity allocations and 43% anticipate reducing illiquid assets. A third (33%) expect to increase corporate bonds, and 23% liability-driven investment allocations.
Most respondents said they rely on investment advice (65%), as 23% have moved to fiduciary management and 13% operate in-house. Governance models are stable as just two respondents plan to change theirs in the next 12 months. Two-fifths (41%) intend to strengthen investment governance through training.
