Your Members. Your Legacy. Our Endgame Solutions.
Strategies for Buyout, Low Dependency, and Run-On for Defined Benefit pension schemes
Comprehensive solution design
Collaborative and comprehensive solutions, designed with your specific needs in mind.
Robust risk management
Ensure stability with our proven pension de-risking and liquidity management strategies.
Versatile investment toolkit
Benefit from our wide range of investment tools, including LDI, buy and maintain and securitised credit solutions.
At Schroders, we recognise that no two pension schemes are alike.
That’s why we:
- Work closely with trustees and sponsors to design the right endgame strategy.
- Consider key factors like scheme size, maturity, risk tolerance, and funding level.
- Provide tailored solutions—from low dependency to buy out and run-on strategies.
The Schroders Retirement Benefit Scheme
A case study on running-on and releasing surplus
This case study details Schroders' implementation of an innovative 'run-on' solution for its pension scheme. The scheme utilises the surplus from its Defined Benefit (DB) section to partially fund ongoing contributions for the Defined Contribution (DC) section.
Scheme size
£640m
Target return
Gilts + 1.2% p.a
Surplus release
c. £8m p.a.
Low dependency
Under this approach, the pension scheme continues to operate, managing its assets and liabilities over time. The focus is on maintaining solvency and meeting pension obligations with low levels of investment risk.
Buyout
An insurance company takes over the liabilities of the pension plan, providing a secure and guaranteed income for all members, thereby allowing the original plan sponsor to effectively remove the pension obligation from their balance sheet.
Run-on
This strategy involves the pension scheme continuing to operate with the intent of investing beyond full funding on a buyout basis, gradually sharing surpluses between members and potentially sponsors over the medium to long-term.
Video 1: Building an investment portfolio for low dependency
Jon Exley, Head of Specialist Solutions, presents on the principles of low dependency portfolios, discussing asset allocation, risk management, and the importance of ongoing monitoring.
Video 2: Building an investment portfolio for pension buyout
Daisy Le Marquand, Solutions Strategist, discusses the factors that influence buyout pricing and how to strategically invest as a pension scheme with a buyout as the ultimate objective.
Video 3: Building an investment portfolio for run-on
Lawrence Phillips, Solutions Strategist explains the concept of a run-on strategy as a method to operate a pension scheme in a highly secure manner with low levels of risk, while generating surplus over time for the benefit of stakeholders. This video delves into the considerations that need to be taken into account when designing investment strategies and portfolios for these kinds of objectives.
PLSA Cashflow Driven Investment (CDI) Made Simple Guide
Download the PLSA Cashflow Driven Investment (CDI) Made Simple Guide, authored by Schroders Solutions, which explains what this form of investment entails and how it compares to more traditional methods. It details how it can create certainty of outcomes for defined benefit schemes and the ways in which trustees can manage and monitor CDI.
"Schroders' Endgame Solutions are crafted to ensure resilience, versatility, and a strong partnership. We recognise the unique needs of various stakeholders and tailor our solutions accordingly. Our approach has weathered even the harshest conditions, such as the 2022 gilts crisis, demonstrating our commitment to robust risk management and effective endgame strategies."
Head of UK Pensions and Retirement Clients
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