Defined benefit (DB) pension schemes should reassess their endgame strategies in 2026, as legislative reforms and funding strength bring surplus sharing and run-on options firmly into focus, Hymans Robertson has said.

In its DB Outlook Report 2026, the consultancy stated that the expected passage of the Pension Schemes Bill will mark a turning point for DB schemes, introducing reforms designed to unlock more than £100bn of surplus capital and create greater flexibility over how schemes manage their endgames.

Recent Budget measures have already reinforced this direction of travel, confirming that surplus can be paid directly to pensioners without an additional tax charge.

Hymans Robertson noted that this had prompted trustees and sponsors to look beyond traditional buyout strategies and consider alternatives such as run-on, consolidation, superfunds, and capital-backed solutions.

The firm said 2026 was likely to be the year when many schemes move from reviewing options to actively implementing new strategies, as the operational and governance details of surplus sharing begin to crystallise.

Alongside legislative change, the revived Pensions Commission is expected to play a central role in shaping industry debate, with a remit to address adequacy, fairness, and sustainability in the pensions system.

Hymans Robertson described this as a rare opportunity to take a more ambitious approach to improving outcomes for members.

However, the consultancy warned that decisions around surplus and endgame strategy will need to balance flexibility with long-term security, particularly as demographic pressures intensify.

Indeed, longer life expectancy, a shrinking working-age population, and the planned rise in the state pension age to 67 from April 2026 could all widen gaps in retirement planning if schemes do not act carefully.

Meanwhile, risk transfer is expected to remain a key part of the landscape, with Hymans Robertson forecasting another record year for buy-ins in 2026.

Strong insurer capacity and competition were forecast to support continued demand, but the firm stressed that data quality will remain critical, regardless of whether schemes were targeting buyout or run-on.

The consultancy also highlighted the ongoing impact of regulatory change, including the second year of The Pensions Regulator’s DB Funding Code and the introduction of Own Risk Assessments.

Trustees were encouraged to ensure these requirements are embedded into decision-making, rather than treated as compliance exercises.

Hymans Robertson head of pensions, Catherine McFadyen, argued that trustees and employers should use 2026 to test whether their schemes are genuinely meeting the adequacy and fairness challenges identified by the Pensions Commission.

She urged schemes to consider what more could be done to improve outcomes for members, and whether new powers under the Pension Schemes Bill could help translate funding strength and surplus into practical action.

While stressing that the year ahead will involve difficult choices, the firm concluded that better-governed schemes and more flexible endgame options could help build a more resilient and equitable DB pensions system in the long term.

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