Defined benefit (DB) pension schemes are entering a new era, shifting their focus from repairing deficits to long-term planning, according to the latest paper from Hymans Robertson.

In its report, Excellence in Endgames: From Vision to Valuation - Why Your Endgame Sets the Course, the consultancy said that under the new DB Funding Code, aligning funding and investment decisions with a clear endgame plan was now a regulatory requirement, meaning trustees and sponsors must formally document their endgame strategy and demonstrate how it supports their approach as part of their next valuation.

Hymans Robertson described this as a “fundamental shift”, urging schemes to take time to agree long-term objectives before their next valuation cycle to ensure these are both compliant and reflective of their true ambitions.

Indeed, the paper outlined how a clearly defined endgame - whether a buyout, run-on, or consolidation - provided the 'strategic anchor' for all subsequent funding, investment, and planning decisions.

Setting this long-term destination, it said, would enable trustees to determine key milestones such as when to reach low dependency, how technical provisions should converge over time, and the appropriate pace and nature of de-risking transitions.

Hymans Robertson emphasised that the chosen endgame would also shape core assumptions and methodologies.

For example, schemes targeting buyout may align their assumptions with insurer pricing and transaction costs, while those pursuing a run-on strategy might adopt higher long-term return assumptions and plan for potential surplus sharing or member benefit enhancements.

The consultancy warned that, with government proposals allowing surplus release at low dependency rather than only at buyout, schemes should avoid locking into strategies that could constrain future flexibility.

It also urged trustees to carefully consider the size and nature of their expense reserves, which, under the funding code, must align with the endgame target - typically covering transaction and wind-up costs for buyout or ongoing administrative expenses for run-on strategies.

Importantly, the paper noted that for the first time, trustees and sponsors must formally document their chosen endgame and explain how their funding and investment strategies support it within a new 'statement of strategy', which will accompany the next valuation submission to The Pensions Regulator.

This, it said, should be treated as an opportunity for meaningful engagement between trustees and employers, enabling more purposeful valuations that tell a coherent long-term story and are grounded in a shared strategic vision.

Commenting on the changes, Hymans Robertson partner and head of DB scheme actuary services, Laura McLaren, described a "big shift" in how schemes approach long-term planning.

"Amidst an expanding range of endgame options, the new funding code has raised the bar, encouraging trustees and employers to engage meaningfully on these issues," she explained.

“More schemes are exploring run-on strategies and surplus sharing.

"With potential surplus release likely to be linked to low dependency, schemes will want to avoid locking into unduly restrictive paths or defaulting to fast-track compliance," continued McLaren.

"The ability to adopt flexible assumptions - including dynamic rates, better alignment with assets, and tailored expense reserves - means schemes with clarity on their endgame can build plans that reflect their true ambitions.”

She added that a clear endgame was “about more than meeting regulatory requirements”, emphasising that it “unlocks long-term value and ensures valuation decisions support, rather than constrain, long-term strategy”.

“With many schemes now in stronger funding positions and the regulatory landscape evolving, sponsors and trustees who engage early and plan with clarity will be best placed to navigate the new landscape and make the most of the options now available,” McLaren concluded.

---