The Large Schemes 2021 research shows a 90% increase in pension schemes with assets over £1 billion since the first report was published in 2013. Meaning there are a lot more schemes and employers with more significant pension challenges. It comes at a time when there’s about to be a step change in regulatory expectations on governance and risk management.
Key finding from the research include:
• There has been a 90% increase in pension schemes with assets over £1 billion since the first report was published in 2013.
• In 2013, around 15% of schemes included in our research were closed to accrual. In 2021 this increased to 55% of schemes being closed to accrual.
• There has been a sustained trend among schemes towards de-risking investment strategies for some time. There is evidence for an acceleration in de-risking from 2019 which has continued into the 2021.
• A total of 15% of the schemes over £5bn are estimated to have an average time to buy-out of less than two years.
• In our previous analysis on large schemes we identified the slowing up in transfer activity among the UK’s largest schemes, with 60% of schemes showing a decrease in transfer activity in 2020 research. This trend has continued with 70% of schemes in the 2021 research showing a further decrease in amounts transferred compared to the 2020 data.
Ali Tayebbi, Partner at BW, said: “While in many ways, this analysis shows a steady continuation of established trends, this is perhaps notable in itself given the nature of the period in question. The funding of large pension schemes appears on average to have been very robust to the turbulent economic markets of the past 18 months.
“Although the Covid-19 pandemic does not appear to have set back these pension schemes, many schemes still have a long way to go to get to their endgames. The demand for de-risking actions will continue to accelerate and schemes will need to be more proactive than ever in getting themselves to the ‘front of the queue’ - whether that is for IFA support on liability management exercises, with insurers for buy-in / buy-out policies or with sponsors for management time.”
You can find the full research here
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