Buyout is still the most popular endgame strategy for defined benefit (DB) schemes, according to a poll conducted at the Pensions and Lifetime Savers Association Investment Conference (PLSA) 2025.

Industry experts were asked to vote on their endgame strategy, with the options including buyout, run on for the longer term, run on for now, other, and undecided.

Two fifths (40 per cent) of the audience selected buyout, the most popular answer, followed by run on for the longer term (32 per cent) and run on for now (20 per cent).

Commenting on the results, PLSA deputy director of policy, Joe Dabrowski, suggested they reflected the "strong" funding levels of DB schemes.

A recent analysis from LCP's Pensions Explorer found that the combined IAS 19 funding level among FTSE 100 firms' DB schemes was around 120 per cent at the end of February.

This corresponded to a surplus of £60bn for the UK pension schemes of FTSE 100 companies.

However, fellow speaker and Legal and General head of delegated solutions, Tim Dougall, argued that the results showed that long-term run on had become a more attractive option for DB schemes.

"While buyout is the more traditional route, it's not the only game in town anymore, with new opportunities for DB schemes," he explained.

Despite this, Dougall admitted that “big questions” remained for trustees and sponsors regarding running on, such as what it would look like for mature pension schemes, how well it would fit into the new DB Funding Code, and the impact of potential changes to DB surplus extraction.

Last month, the UK chancellor, Rachel Reeves, announced plans to lift restrictions on how well-funded occupational DB pension schemes could invest their surplus funds, unlocking "millions" of pounds to drive growth and boost pension pots.

Following this, research from mallowstreet, commissioned by Brightwell, revealed that DB schemes were keeping their options open regarding endgame strategies, highlighting the significant impact of regulatory uncertainty on scheme decision-making - particularly around surplus extraction rules.

“We will wait to see how guardrails evolve for extracting surplus,” Dougall concluded.

“In the meantime, schemes should keep their options open and prepare for both running on and buying out.”

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