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  • Preparedness for buy-in or buy-out remains key barrier to endgame for DB Scheme Trustees
  • 28% of trustees cite preparedness for buy-in or buy-out as a barrier to pursuing their endgame strategy - increasing from 26% a year ago
  • All trustees considering buy-in or buy-out sought specialist advice to evaluate and improve their scheme’s data or administration processes, with over a third (36%) conducting a data cleanse exercise

Preparedness for buy-in or buy-out remains at the forefront of Defined Benefit (DB) Scheme Trustees’ minds, with over a quarter (28%) citing it as a key barrier to pursing their endgame strategy1, according to new research from Standard Life, part of Phoenix Group – increasing from 26% a year ago2.

Preparedness for a bulk annuity transaction refers to the process of ensuring that a scheme is ready to transact ahead of approaching the market for a quotation. It can include wide-ranging activities, such as conducting a feasibility study, updating and maintaining the quality of scheme data, engaging key stakeholders such as the scheme’s sponsor or administrator and ensuring benefit specifications are up to date.

The research, which surveyed 50 trustees of Defined Benefit Schemes over £100m, found that results were broadly consistent for schemes of different sizes. This barrier was cited by nearly one-third (30%) of trustees of larger schemes managing between £500m - £999.99m in assets, a significant increase on the 18% of trustees of larger schemes who cited this a year ago. This is compared to 27% for trustees of mid-sized schemes with between £250m - £499.99m in assets, and 29% for trustees of smaller schemes with between £100m - £249.99m in assets.

Despite the preparedness challenge, the findings also show that trustees are responding by seeking specialist advice to help overcome the preparation barrier. 100% of trustees considering a buy-in or buy-out have sought advice to evaluate and improve their scheme’s data administration processes, for example. While the majority (64%) found that no action was required as their data was in good shape, over one-third (36%) have undertaken or intend to undertake a data cleanse - a process which typically involves correcting errors or filling identified data gaps.

Kunal Sood, Managing Director of Defined Benefit Solutions at Standard Life, said, “Thorough preparation is essential for schemes looking to secure a successful BPA transaction and data quality plays a pivotal role in that process. Inadequate or inaccurate data can hinder an insurer’s ability to assess liabilities accurately or calculate buy-out pricing, creating roadblocks in the buy-in or buy-out process. Additionally, issues such as incomplete member records, historical errors, and inconsistent data formats often necessitate time-consuming and costly remediation efforts.

“While general preparedness for endgame strategies remains a challenge, it’s encouraging that many trustees are being proactive and seeking guidance and advice ahead of approaching an insurer. In doing so, trustees will be best placed to evaluate and enhance their data quality, minimise barriers and strengthen their position. With evolving market conditions, prioritising preparation, and in particular, data readiness, this ensures a smoother transition and better outcomes for members. Accurate and well-maintained data is not just a technical requirement, it’s the foundation of a successful endgame strategy.”

 

Notes to editors

1 - Research commissioned by Standard Life and conducted by Censuswide, with a representative sample of 50 DB pension Trustees with schemes over £100m, between 7th October – 22nd October 2024.

2 - Research commissioned by Standard Life and conducted by Censuswide, with a representative sample of 50 DB pension Trustees with schemes over £100m, between 28th April – 9th May 2023.

Media enquiries

For further information, photos, video content or interviews, contact:


Jennifer Smallwood
Senior PR Manager
Standard Life, part of Phoenix Group
07858 367818
Jennifer_Smallwood@standardlife.com

Samantha Griffith
PR Manager
Standard Life, part of Phoenix Group
07752 465345
samantha_griffith@standardlife.com

 

About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension schemes.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together.
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.
  • Standard Life is the proud headline sponsor of Race for Life, Cancer Research UK’s flagship fundraising event series.

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