28th April 2022

Consolidation and the path to endgame

It has been well publicised of late, that with rising long-term interest rates and favourable investment conditions, many employers and trustees are finding that their defined benefit pension schemes are suddenly much better funded than they have been for a very long time.

The Pensions Regulator noted this positive experience in its Annual Funding Statement for 2022, published yesterday, stating that “for many schemes, their funding levels are ahead of plan”.

That may allow some schemes to move towards their endgame strategies sooner than they might have thought possible. However, most smaller schemes could still benefit from consolidation along the way, even over a potentially shorter time horizon. Stoneport can deliver financial and operational benefits to any scheme that isn’t targeting buy-out within the next five years. To find out why, read our short note (and the accompanying report, if you really want to dig into the detail).

Plus of course the recent funding gains could very easily be lost, pushing back those endgame plans once again. As you would expect, the Pensions Regulator urges caution and highlights a number of risks to schemes, including the situation in Ukraine and the “lingering effects of COVID-19 and Brexit”. Addressing the covenant aspect of those risks, ahead of achieving the endgame, is a key benefit of joining Stoneport.

For more information on how joining Stoneport can get you to your endgame, visit www.stoneport.co.uk.