Optimising your endgame: Choosing the right consolidation path for your scheme
Exploring the range of consolidation paths and endgame options to help trustees and sponsors make confident, informed decisions about their scheme’s future.
Defined benefit (DB) pension schemes have reached an inflection point. After years of focusing on deficit recovery, many DB schemes now find themselves with improved funding positions, which has shifted the focus firmly toward endgame planning. While buy-in / buy-out has been historically seen as the default endgame for many schemes, it’s not always immediately achievable nor available. The UK Government is supportive of pension scheme consolidation - aiming to reduce market fragmentation, improve efficiency, and unlock surplus to support economic growth. This shift is fuelling the rise of alternative endgame strategies and new pathways (which will be explored in this guide), with consolidation increasingly being used either as a long-term run-on solution or as a transitional vehicle toward a superfund or buy-out. For trustees and sponsors, opportunity abounds but so does complexity - each path comes with different implications for governance, funding, member outcomes, member experience and long-term risk. With The Pensions Regulator (TPR) expecting more frequent reviews of strategy and governance1, the need to make informed, timely decisions has never been greater. The decision-making process can be overwhelming - this guide is here to help. It simplifies the expanding landscape of consolidation options, helping trustees and sponsors to navigate the diverse journeys schemes can take and highlights the benefits and considerations of each potential route.
The UK’s defined benefit pension landscape has undergone a profound transformation in recent years. Regulatory reforms, shifting market dynamics, and improved funding positions have brought new opportunities and challenges for trustees and sponsors.
Navigate with confidence
1
From deficit to surplus We’ve seen a remarkable shift from deficit to surplus. Rising interest rates, strong investment returns, and slower longevity improvements mean many schemes are now fully funded, or even in surplus, on a buy-out basis. As of June 2025, PwC’s Buy-out Index reports a surplus position of £95bn2 across nearly 5,000 schemes. It’s no surprise that the conversation has now moved to endgame planning.
Regulatory pressures and market dynamics Regulatory pressures and market dynamics are also evolving. Government initiatives such as the Mansion House reforms and the Pension Schemes Bill will introduce greater flexibility around surplus extraction and encourage alternatives to traditional buy-out, such as run-on and other forms of consolidation, including pension superfunds. Our research3 in July 2024 found that 87% of trustees viewed run-on as an attractive endgame option. The Pensions Regulator now expects trustees to regularly review their strategy for delivering promised benefits and has recognised alternative endgame options for well-funded schemes in its guidance4. Technical Actuarial Standard 300 requirements5 also mean actuaries must evaluate alternative options alongside insurance buy out, ensuring advice considers a full range of possibilities for each scheme.
Rising costs and complexity Meanwhile, DB schemes are becoming more complex and costly to manage. Despite improved funding, scheme expenses are increasing due to project fees - like those for the Pensions Dashboard and GMP equalisation. Our research3 found that 90% of trustees have seen scheme running costs increase by more than 10%, primarily due to actuarial and data-related services. Although new surplus extraction rules under consultation could help mitigate these costs, they may also introduce further complexity and advisory fees.
The pace of change in the DB pensions market has sparked a wave of innovation, reshaping the options available to trustees and sponsors. The right solution for your scheme and members will depend on your unique circumstances, but one thing is clear: now is the time to pause, review your operating model, and simplify how your scheme is run - placing renewed focus on governance, strategy, and endgame.
of trustees reported rising running costs of DB schemes.
Now you’ve narrowed it down to the most relevant options for your scheme, take a closer look at the factors that could influence your decision. The considerations below will help you evaluate each option in the context of your scheme’s objectives, governance capacity, and long-term strategy.
Evaluate the potential benefits of each option against the associated risks and compare them to maintaining the status quo. Consider financial implications, operational complexity, impact on the sponsor, time horizon, and the impact on long-term security.
Risk vs reward
Ensure alignment between all key stakeholders including trustees and sponsors in the agreed endgame goal.
Sponsor's view
Prioritise the quality of service and the security of member benefits. Assess whether the chosen option enhances member experience and maintains or improves benefit certainty.
Member outcomes
Understand how each option affects the strength and role of the sponsoring employer covenant. Some strategies remove covenant reliance entirely, while others maintain it. This has significant implications for risk management.
Strength of covenant
Understand any key man risk, whether within the trustee board or pensions personnel, and if there is a succession plan in place. What are the implications if there isn’t, and how can these solutions help?
Succession planning
Assess whether your trustee board has the time, expertise, and resources to manage the complexity of the chosen arrangement. Options that reduce governance burden may be preferable for smaller or resource-constrained trustees.
Governance capacity
Flexibility
Recognise that poor data can limit your options, increase costs or delay implementation. Accurate, complete member and benefit data is critical for pricing, risk assessment, and regulatory compliance. Plan early for data cleansing and validation.
Data quality
Consider the terms for entering and exiting the arrangement in the context of your endgame strategy, as well as the ability to adapt to future changes in funding, regulation, or market conditions. Some models are permanent, while others allow for transition to buy-out or alternative strategies.
Considering these key factors in the context of the available options will help to guide decision making towards the right endgame for your scheme.
There is no one-size-fits-all solution. The optimal path depends on your scheme’s funding, governance capacity, and long-term objectives. Taking time now to evaluate your options, while ensuring you retain flexibility, will pay dividends in security, efficiency, and member confidence. With an ever-changing regulatory environment and market innovation accelerating, now is the time to: Engage early on long-term strategy Collaborate with each other (advisers, trustees and sponsors) to align goals Take advice from genuinely independent advisers to explore these different models, but be aware of conflicts of interest Conduct due diligence on potential options and providers
Hover to learn more
At TPT, we’re driving real change in the pensions market and are at the forefront of innovation. We are in the process of bringing two new pioneering solutions to market: CDC multi-employer scheme and a superfund. These innovations are expanding choice for schemes, giving trustees and sponsors new ways to deliver security and value, while aiming to unlock better outcomes for members.
Designed to run-on and enhance member benefits, our superfund will provide another option for schemes considering risk transfer as part of their endgame strategy.
Superfund - Coming soon
Fiduciary Management
DB Master Trust
DB Multi-Trust
With expert governance, robust risk management, and access to diverse and previously inaccessible assets through our scale, we tailor strategies to your scheme’s risk appetite and endgame goals.
End-to-end scheme management for greater efficiency and accountability, alongside trusteeship services.
Integrated multi-trust solution (covering actuarial, administration, covenant and fiduciary management services) whilst retaining your existing trustee board.
DB Multi-trust
Curious about your DB consolidation options?
Our expert team can help you navigate the full landscape of DB consolidation solutions and pinpoint what’s right for your scheme. Let’s talk - get in touch for a tailored discussion.
Michael Callari Business Development Manager michael.callari@tpt.co.uk
Katherine Lynas Head of Consultant Relations katherine.lynas@tpt.co.uk
Chris Dickins Client Director, TPTIM chris.dickins@tpt.co.uk
Consolidation: Supporting run-on, superfund and buy-out endgames
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Let's explore the available pathways:
Our ownership: TPT Retirement Solutions Limited is wholly owned by Verity Trustees Limited in its capacity as trustee of The Pensions Trust. TPT Investment Management Limited is a wholly owned subsidiary of TPT Retirement Solutions Limited. Group Services & Regulation: Verity Trustees Limited is the corporate trustee of The Pensions Trust and The Pensions Trust 2016. It is a company limited by guarantee and is regulated by The Pensions Regulator. Registered in England and Wales under company number 00744017. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT TPT Retirement Solutions Limited provides pension management and administration services to UK pension schemes. Registered in England and Wales under company number 09639961. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT TPT Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FCA) and provides investment management and consultancy services to UK pension schemes. Registered in England and Wales under company number 14527587. Registered office: Aire Park, 5th Floor, 3 South Brook Street, Leeds, LS10 1FT
Sources
1.
TPT Retirement Solutions research on challenges facing DB scheme trustees, July 2024
3.
The Pensions Regulator | Market oversight: Professional trusteeship
4.
PwC | Pensions overhaul could unlock up to 25% of DB scheme value
2.
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For professional use only. Not for individual/member use. This document is for information purposes only and does not constitute financial or legal advice. Trustees and sponsors should seek independent advice tailored to their circumstances.
Consolidation can play a key role in a scheme’s journey, either as a long-term run-on solution or as a transitional vehicle toward a risk transfer endgame such as buy-out or superfund.
Our DB solutions help schemes evaluate their interim options and identify the approach that best aligns with their endgame objectives. They include:
Why this matters now: Foreword by David Lane
2
Key considerations to help you decide
4
So, what now?
5
TPT: Making pension schemes perform better for everyone
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FRC | TAS 300 / TAS 310
5.
The Pensions Regulator | New models and options in defined benefit pensions schemes
of trustees viewed run-on as an attractive endgame option.
David Lane CEO, TPT Retirement Solutions
Risk transfer options Insurance buy-out is often still seen as the default endgame option for well-funded schemes. However, the market is innovating to help schemes, and their members, to take advantage of other options. A superfund could be a viable alternative for those schemes that don’t currently have a large surplus funding position and cannot afford alternatives such as a full buy-out with an insurer.
Your scheme
Click on a path to explore your options
Path 1
Path 2
Path 3
Path 4
Superfund
Buy-in / Buy-out
Transitional vehicle
Governance relief • Fiduciary management • Professional trustee Consolidation • DB Master Trust • DB Multi-Trust
Strategic run-on
Considerations
Affordability: Buy-out is typically the more expensive endgame option, requiring full funding on insurer terms. Preparation Costs: Schemes must undergo extensive data and benefit audits, which can be time-consuming and resource intensive. Market Timing: Pricing can fluctuate based on insurer appetite, interest rates, and longevity assumptions.
Benefits
Security: Transfers member liabilities to a regulated insurer, providing long-term benefit security backed by the insurance regime. Finality: Buy-out, like superfund, allows schemes to wind up, removing ongoing governance, administration, and sponsor risk. Sponsor Relief: Reduces or eliminates future funding obligations for the sponsoring employer, like a superfund.
Overview
These are insurance-based endgame solutions that transfer pension liabilities from the scheme to an insurer. In a buy-in, the scheme purchases a bulk annuity policy that remains within the trust and pays pensions as they fall due. In a buy-out, the insurer takes over responsibility for paying members directly, and the scheme winds up. Schemes may either start with a buy-in and move to buy-out or go straight to buy-out. This solution works for well-funded schemes nearing maturity or endgame, (especially those with clean data and a clear governance structure), for sponsors seeking full risk removal and trustees aiming for long-term member security and scheme closure.
Path 1: Straight to buy-in / buy-out
Ongoing Risk: The scheme remains exposed to investment, longevity, and inflation risks, which must be actively managed. Long-Term Commitment: Requires sustained governance, administration, and sponsor support over time – the costs of which need to be considered.
Strategic preparation: Consolidation can help schemes strengthen funding positions, enhance governance, and improve data – essential for securing insurance buy-out or transferring to a superfund. Retaining flexibility: By not committing to an irreversible path, schemes can keep their options open while deciding on their ultimate endgame. Improved attractiveness to insurers or superfunds: A more streamlined, better-governed scheme is more likely to secure favourable terms when the time comes to transact.
For schemes not yet ready for buy-out or superfund entry, consolidation can serve as a well-planned ‘stepping stone’, helping them become more attractive to insurers or superfunds while improving readiness to transfer in the future. Governance relief strategies, such as fiduciary management or a professional trustee, can reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This can allow schemes to operate more efficiently and focus on long-term planning. Consolidation strategies, such as a DB Master Trust or a DB Multi-Trust, allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, potentially reducing costs and improving operational resilience. This path is particularly suited to schemes that are 3+ years away from potential risk transfer and are looking to improve their funding positions while keeping the sponsor covenant in place.
Path 2: Consolidation as a transitional vehicle
Ongoing Risk: The scheme remains exposed to investment, longevity, and inflation risks, which must be actively managed. Long-Term Commitment: Requires sustained governance, administration, and sponsor support over time – the costs of which need to be considered. Regulatory Scrutiny: Trustees must demonstrate that run-on is in members’ best interests and that the strategy is well-managed.
Access to scale benefits: Smaller schemes can gain access to investment opportunities, risk management tools, and operational efficiencies that would otherwise be out of reach. Cost reduction and improved oversight: Consolidated models streamline administration, accounting, and investment management, which can reduce complexity and adviser costs. Flexibility: These models allow schemes to retain the sponsor covenant and, in some cases, trustee board, offering a stable and adaptable platform for long-term run-on. Optionality: Consolidating while running on allows you to retain optionality, leaving the door open to a potential risk transfer to a superfund or buy-out further down the line. Potential surplus benefits: The sponsor and member have the potential to benefit from a growing scheme surplus as it runs on.
This approach supports long-term scheme sustainability while keeping future endgame options open. It enables the sponsor and trustees to focus on strategic decision-making, manage risk effectively, and potentially deliver improved member outcomes over time, without committing to an immediate buy-out. Governance relief strategies, such as fiduciary management or a professional trustee, can reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This can allow schemes to operate more efficiently and focus on long-term planning. Consolidation strategies, such as a DB Master Trust or a DB Multi-Trust, allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, potentially reducing costs and improving operational resilience. This route can be suitable for schemes that are well-funded and confident in their ability to continue operating independently. Consolidation can offer a more efficient and cost-effective way to run-on over the long term.
Path 3: Consolidation for run-on
Irreversible transfer: Once assets and liabilities are transferred, the scheme exits the sponsor’s control. Preparation costs: The cost of advice and gateway tests to assess feasibility, meet regulatory requirements, and structure the transaction appropriately should be factored into early-stage budgeting and planning.
Sponsor Relief: Reduces or eliminates future funding obligations for the sponsoring employer, like buy-out. Finality: Superfund, like buy-out, allows schemes to wind up, removing ongoing governance, administration, and sponsor risk. Affordability: Schemes can transfer to superfund often earlier than a transfer to buy-out, making risk transfer more accessible for some schemes. Regulatory oversight: TPR clearance ensures member interests are protected.
A superfund transaction involves a full transfer of a DB scheme’s assets and liabilities into an approved commercial consolidator. This breaks the employer covenant entirely and replaces it with a ring-fenced capital buffer designed to safeguard member benefits. Under the current TPR interim regime, Superfunds must meet stringent expectations on funding, governance, investment, and risk management until a formal legislative authorisation framework is introduced. Only consolidators that satisfy these standards can accept transfers. The only available superfund to date has been a bridge to buy-out, but innovation is accelerating, and new propositions are emerging that support long-term run-on and surplus sharing to members. A superfund transfer is typically most attractive for schemes that are unlikely to reach buy-out in the short-term, yet want certainty of outcome, full discharge from the employer, and the prospect of improved member outcomes through surplus sharing over time.
Path 4: Straight to Superfund
Learn more
We’re developing a run-on Superfund that aims to enhance member benefits
Buy in / Buy out
Strategic run on
Governance relief • Fiduciary management • Professional trustee Consolidation • DB Mast Trust • DB Multi-Trust
Buy-in / Buy out
Strategic preparation: Consolidation can help schemes strengthen funding positions, enhance governance, and improve data – essential for securing insurance buy out or transferring to a superfund. Retaining flexibility: By not committing to an irreversible path, schemes can keep their options open while deciding on their ultimate endgame. Improved attractiveness to insurers or superfunds: A more streamlined, better-governed scheme is more likely to secure favourable terms when the time comes to transact.
For schemes not yet ready for buy out or superfund entry, consolidation can serve as a well-planned ‘stepping stone’, helping them become more attractive to insurers or superfunds while improving readiness to transfer in the future. Governance relief strategies, such as fiduciary management or a professional trustee, can reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This can allow schemes to operate more efficiently and focus on long-term planning. Consolidation strategies, such as a DB Master Trust or a DB Multi-Trust, allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, potentially reducing costs and improving operational resilience. This path is particularly suited to schemes that are 3+ years away from potential risk transfer and are looking to improve their funding positions while keeping the sponsor covenant in place.
Affordability: Buy out is typically the more expensive endgame option, requiring full funding on insurer terms. Preparation Costs: Schemes must undergo extensive data and benefit audits, which can be time-consuming and resource intensive. Market Timing: Pricing can fluctuate based on insurer appetite, interest rates, and longevity assumptions.
Security: Transfers member liabilities to a regulated insurer, providing long-term benefit security backed by the insurance regime. Finality: Buy out, like superfund, allows schemes to wind up, removing ongoing governance, administration, and sponsor risk. Sponsor Relief: Reduces or eliminates future funding obligations for the sponsoring employer, like a superfund.
These are insurance-based endgame solutions that transfer pension liabilities from the scheme to an insurer. In a buy-in, the scheme purchases a bulk annuity policy that remains within the trust and pays pensions as they fall due. In a buy out, the insurer takes over responsibility for paying members directly, and the scheme winds up. Schemes may either start with a buy-in and move to buy out or go straight to buy out. This solution works well for well-funded schemes nearing maturity or endgame, especially those with clean data and a clear governance structure, for sponsors seeking full risk removal and trustees aiming for long-term member security and scheme closure.
Path 1: Straight to buy-in/buy out
These are insurance-based endgame solutions that transfer pension liabilities from the scheme to an insurer. In a buy-in, the scheme purchases a bulk annuity policy that remains within the trust and pays pensions as they fall due. In a buy out, the insurer takes over responsibility for paying members directly, and the scheme winds up. Schemes may either start with a buy-in and move to buy out or go straight to buy out. This solution works for well-funded schemes nearing maturity or endgame, especially those with clean data and a clear governance structure, for sponsors seeking full risk removal and trustees aiming for long-term member security and scheme closure.
Path 1: Straight to buy-in / buy out
Sponsor Relief: Reduces or eliminates future funding obligations for the sponsoring employer, like buy out. Finality: Superfund, like buy out, allows schemes to wind up, removing ongoing governance, administration, and sponsor risk. Affordability: Schemes can transfer to superfund often earlier than a transfer to buy out, making risk transfer more accessible for some schemes. Regulatory oversight: TPR clearance ensures member interests are protected.
A superfund transaction involves a full transfer of a DB scheme’s assets and liabilities into an approved commercial consolidator. This breaks the employer covenant entirely and replaces it with a ring-fenced capital buffer designed to safeguard member benefits. Under the current TPR interim regime, Superfunds must meet stringent expectations on funding, governance, investment, and risk management until a formal legislative authorisation framework is introduced. Only consolidators that satisfy these standards can accept transfers. The only available superfund to date has been a bridge to buy out, but innovation is accelerating, and new propositions are emerging that support long-term run-on and surplus sharing to members. A superfund transfer is typically most attractive for schemes that are unlikely to reach buy out in the short-term, yet want certainty of outcome, full discharge from the employer, and the prospect of improved member outcomes through surplus sharing over time.
Access to scale benefits: Smaller schemes can gain access to investment opportunities, risk management tools, and operational efficiencies that would otherwise be out of reach. Cost reduction and improved oversight: Consolidated models streamline administration, accounting, and investment management, which can reduce complexity and adviser costs. Flexibility: These models allow schemes to retain the sponsor covenant and, in some cases, trustee board, offering a stable and adaptable platform for long-term run-on. Optionality: Consolidating while running on allows you to retain optionality, leaving the door open to a potential risk transfer to a superfund or buy out further down the line. Potential surplus benefits: the sponsor has the potential to benefit from a growing scheme surplus as it runs on.
This approach supports long-term scheme sustainability while keeping future endgame options open. It enables the sponsor and trustees to focus on strategic decision-making, manage risk effectively, and potentially deliver improved member outcomes over time, without committing to an immediate buy out. Governance relief strategies, such as fiduciary management or a professional trustee, can reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This can allow schemes to operate more efficiently and focus on long-term planning. Consolidation strategies, such as a DB Master Trust or a DB Multi-Trust, allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, potentially reducing costs and improving operational resilience. This route can be suitable for schemes that are well-funded and confident in their ability to continue operating independently, consolidation can offer a more efficient and cost-effective way to run-on over the long term.
Defined Benefit (DB) pension schemes have reached an inflection point. After years of focussing on deficit recovery, many DB schemes now find themselves with improved funding positions, which has shifted the focus firmly toward endgame planning. While buy in/buy out has been historically seen as the default endgame for many schemes, it’s not always immediately achievable nor available. The UK government is supportive of pension scheme consolidation - aiming to reduce market fragmentation, improve efficiency, and unlock surplus to support economic growth. This shift is fuelling the rise of alternative endgame strategies and new pathways (which will be explored in this report), with consolidation increasingly being used either as a long-term run-on solution or as a transitional vehicle toward a superfund or buy out. For trustees and sponsors, opportunity abounds but so does complexity - each path comes with different implications for governance, funding, member outcomes, member experience and long-term risk. With The Pensions Regulator (TPR) expecting more frequent reviews of strategy and governance1, the need to make informed, timely decisions has never been greater. The decision-making process can be overwhelming - this report is here to help. It simplifies the expanding landscape of consolidation options, helping trustees and sponsors to navigate the diverse journeys schemes can take and highlights the benefits and considerations of each potential route.
From deficit to surplus We’ve seen a remarkable shift from deficit to surplus. Rising interest rates, strong investment returns, and slower longevity improvements mean many schemes are now fully funded, or even in surplus, on a buy out basis. As of June 2025, PwC’s Buy out Index reports a surplus position of £95bn2 across nearly 5,000 schemes. It’s no surprise that the conversation has now moved to endgame planning.
Regulatory pressures and market dynamics Regulatory pressures and market dynamics are also evolving. Government initiatives such as the Mansion House reforms and the Pension Schemes Bill will introduce greater flexibility around surplus extraction and encourage alternatives to traditional buy out, such as run-on and other forms of consolidation, including pension superfunds. Our research3 in July 2024 found that 87% of trustees viewed run-on as an attractive endgame option. The Pensions Regulator now expects trustees to regularly review their strategy for delivering promised benefits and has recognised alternative endgame options for well-funded schemes in its guidance4. Technical Actuarial Standard 300 requirements5 also mean actuaries must evaluate alternative options alongside insurance buy out, ensuring advice considers a full range of possibilities for each scheme.
Rising costs and complexity Meanwhile, DB schemes are becoming more complex and costly to manage. Despite improved funding, scheme expenses are increasing due to project fees like those for the Pensions Dashboard and GMP equalisation. Our research3 found that 90% of trustees have seen scheme running costs increase by more than 10%, primarily due to actuarial and data-related services. Although new surplus extraction rules under consultation could help mitigate these costs, they may also introduce further complexity and advisory fees.
of trustees reported rising running costs of DB schemes
Schemes that have key man risk – whether that be within the trustee board or pensions personnel, is there a succession plan and what are the implications if there is not? How can these solutions help?
DB Complete (Master Trust)
DB Connect (Multi-Trust)
DB Connect (Multi-trust)
Consolidation: Supporting run-on, superfund and buy out endgames
Consolidation can play a key role in a scheme’s journey, either as a long-term run-on solution or as a transitional vehicle toward a risk transfer endgame such as buy out or superfund.
David Lane TPT CEO
Consolidation DB Master Trust DB Multi-Trust
Governance relief Fiduciary Management Professional trustee
Ongoing Risk: The scheme remains exposed to investment, longevity, and inflation risks, which must be actively managed. Long-Term Commitment: Requires sustained governance, administration, and sponsor support over time, the costs of which need to be considered.
Risk transfer options Insurance buy out is often still seen as the default endgame option for well-funded schemes. However, the market is innovating to help schemes, and their members, to take advantage of other options. A superfund could be a viable alternative for those schemes that don’t currently have a large surplus funding position and cannot afford alternatives such as a full buy out with an insurer.
Path 3: Straight to Superfund
Path 4: Consolidation for strategic run on
Access to scale benefits: Smaller schemes can gain access to investment opportunities, risk management tools, and operational efficiencies that would otherwise be out of reach. Cost reduction and improved oversight: Consolidated models streamline administration, accounting, and investment management, which can reduce complexity and adviser costs. Flexibility: These models allow schemes to retain the sponsor covenant and, in some cases, trustee board, offering a stable and adaptable platform for long-term run-on. Optionality: Consolidating while running on allows you to retain optionality, leaving the door open to a potential risk transfer to a superfund or buy out further down the line. Potential surplus benefits: The sponsor has the potential to benefit from a growing scheme surplus as it runs on.
We offer DB Master Trust and Multi-Trust solutions to support this route Find out more
We’re developing a run-on Superfund that aims to enhance member benefits. Learn more
A guide to help trustees and sponsors make confident, informed decisions about their scheme’s future.
Defined Benefit (DB) schemes have reached an inflection point. After years of focussing on deficit recovery, many DB pension schemes now find themselves with improved funding positions, which has shifted the focus firmly toward endgame planning. While buy-in/buy-out remains the default endgame for many schemes, it’s not always immediately achievable nor available. Meanwhile, the UK government is accelerating its push for pension scheme consolidation, aiming to reduce market fragmentation, improve efficiency, and unlock surplus to support economic growth. This shift is fuelling the rise of alternative endgame strategies and new pathways, with consolidation increasingly being used either as a long-term run-on solution or as a transitional vehicle toward risk transfer. For trustees and sponsors, opportunity abounds, but so does complexity — each path comes with different implications for governance, funding, member outcomes, and long-term risk. With TPR expecting more frequent reviews of strategy and governance, the pressure to make informed, timely decisions has never been greater. This guide is here to help. It breaks down the growing range of consolidation options and their application in the myriad potential journeys of a scheme, highlighting their risks, rewards, and practical considerations. While this guide doesn’t offer formal advice, it’s a valuable tool to help you assess your choices and take confident steps toward your scheme’s future.
The UK’s DB pension landscape has changed dramatically in recent years. Regulatory reforms, market shifts, and improved funding positions have created both opportunities and challenges for trustees and sponsors.
Why this matters now
A. From deficit to surplus Rising interest rates, strong investment returns, and slower longevity improvements mean many schemes are now fully funded, or even in surplus, on a buy-out basis. As of August 2025, the PPF 7800 Index reports an aggregate surplus of £241.1bn2 across nearly 5,000 schemes. It’s therefore no surprise that the conversation has now shifted to endgame planning, including preferred endgame strategy and exploring whether there is an option for surplus utilisation.
B. Regulatory pressures and market dynamics Government initiatives such as the Mansion House reforms and the Pension Schemes Bill will introduce greater flexibility around surplus extraction and encourage alternatives to traditional buy-out. It has been another record year for insurance transactions, but more attention is now being given to credible alternative options such run-on and other forms of consolidation, such as pension superfunds. Our research in July 2024 showed that 87% of trustees viewed run on as an attractive option, either as a full strategy or as a practical way to improve the affordability of a buy-out. TPR now expects trustees to regularly review their strategy for delivering promised benefits and has recognised alternative endgame options for well-funded schemes in its New models and options in defined benefit pensions schemes guidance, published in June 2025. TAS300 requirements also require actuaries to evaluate alternative options in comparison to an insurance buy-out, to ensure their advice considers a range of options for the scheme.
C. Rising costs and complexity Over time, DB schemes have become more time consuming and complex to run, which means that while funding positions have improved, running costs are climbing. This is being compounded by additional fees for obligations such as the Pensions Dashboard and Guaranteed Minimum Pension equalisation. In July 2024, our research found that 90% of trustees reported costs rising by more than 10%, driven (primarily) by actuarial and data-related services. Although new surplus extraction rules under consultation could help mitigate rising costs, taking advantage of them could also introduce more complexity.
The pace of change in the DB pensions market has sparked a wave of innovation, reshaping the options available to trustees and sponsors. The right solution for your scheme will depend on your unique circumstances, but one thing is clear: now is the time to pause, review your operating model and simplify how your scheme is run, placing focus on governance, strategy and endgame.
DB Consolidation Analyser: Which path is right for you?
Whether you're navigating funding deficits or considering running-on, there are consolidation solutions which can offer valuable support to help you get to your endgame more efficiently. But navigating the growing landscape of consolidation options can be complex for DB schemes.
The DB Consolidation Analyser is a personalised decision-making tool to help you explore the options and different pathways.
Ultimately considering these key factors in the context of the available options will help guide decision making as to the right endgame for your scheme.
TPT: Pension people solving pension problems
At TPT, we’re driving real change in the pensions market and are at the forefront of innovation. We are in the process of bringing two new pioneering solutions to market: CDC multi-employer scheme and Superfund. These innovations are expanding choice for schemes, giving trustees and sponsors new ways to deliver security and value, while unlocking better outcomes for members.
We believe members deserve a future built on lasting value. Powered by the strength of a dedicated pension fund, our superfund creates opportunities for members to share in long-term growth with uplifted benefits. This regulated, capital-backed solution is perfect for schemes seeking a cost-effective alternative to buy-out or sponsors with all but the strongest covenant.
Our DB solutions help schemes evaluate their interim options and identify the approach that best aligns with their endgame objectives. Our DB Solutions include:
Fiduciary management
DB master trust
DB multi-employer
Our fiduciary management service is dedicated to delivering superior outcomes for pension schemes, unlocking sophisticated investment opportunities, without the complexity.
Our DB Master Trust option streamlines governance and reduces costs. Benefit from a full-service solution that combines administration, actuarial, investment, and trusteeship under one roof.
With our DB Multi-Trust solution, the existing trustee board remains in place while accessing the scale and expertise of a Master Trust. This integrated full-service model is built for flexibility and efficiency.
DB multi-trust
Jonathan Jackaman Head of DB Distribution jonathan.jackaman@tpt.co.uk
Consolidation — Supporting both run-on and risk transfer endgames
Consolidation can play a dual role in a scheme’s journey: either as a long-term run-on solution or as a transitional vehicle toward a risk transfer endgame such as buy-out or Superfund.
Let's explore both pathways:
Consolidation for run-on
For schemes that are well-funded and confident in their ability to continue operating independently, consolidation can offer a more efficient and cost-effective way to run on over the long term. Governance relief strategies reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This allows schemes to operate more efficiently and focus on long-term planning. Consolidation strategies allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, helping schemes reduce costs and improve operational resilience.
Benefits of using consolidation for run-on include:
Access to scale benefits: Smaller schemes can gain access to investment opportunities, risk management tools, and operational efficiencies that would otherwise be out of reach.
Cost reduction and improved oversight: Consolidated models streamline administration, accounting, and investment management, reducing complexity and adviser costs.
Flexibility: These models allow schemes to retain the sponsor covenant and, in some cases, trustee board, offering a stable and adaptable platform for long-term run-on.
Consolidation as a transitional vehicle to risk transfer
For schemes not yet ready for buy-out or Superfund entry, consolidation can serve as a well-planned ‘stepping stone’, helping them become more attractive to insurers or Superfunds while improving readiness. It’s particularly suited to schemes that are 3+ years away from their endgame and are looking to improve their funding positions while keeping the sponsor covenant in place. Governance relief strategies reduce the operational burden on trustees by delegating day-to-day responsibilities to expert providers, while retaining strategic oversight. This allows schemes to operate more efficiently and focus on long-term planning. Consolidation strategies allow schemes to benefit from shared services and economies of scale while maintaining individual scheme identities. These models streamline administration, investment, and governance functions, helping schemes reduce costs and improve operational resilience.
Risk transfer options Insurance buy-out is still considered the default option endgame. However, the market is innovating to help schemes, and their members, take advantage of other options. Whereas well-funded schemes may be comfortable running on, with the support of one of the interim consolidation or governance relief options, Superfund could well be a viable alternative for those for schemes that don’t have large surplus funding positions and cannot afford alternatives such as a full buy-out with an insurer. We’re developing the UK’s first run on Superfund – learn more about what we’re building.
Benefits of using consolidation as a transitional vehicle include:
Strategic preparation: Consolidation helps schemes strengthen funding positions, enhance governance, and improve data – essential for securing insurance buy-out or transferring to a Superfund.
Retaining flexibility: By not committing to an irreversible path, schemes can keep their options open while deciding on their ultimate endgame.
Improved attractiveness to insurers or Superfunds: A more streamlined, better-governed scheme is more likely to secure favourable terms when the time comes to transact.
