Half (50 per cent) of defined benefit (DB) pension scheme trustees have a clear endgame strategy in place, although several barriers to delivering these strategies remain, research from Standard Life has revealed.

Its survey of DB pension trustees of schemes larger than £100m found that 48 per cent do not have a clear endgame strategy, while 2 per cent responded with ‘don’t know’.

Market volatility was seen as the biggest barrier to pursuing endgame strategies by both trustees that have a plan in place and those who do not, with 40 per cent citing it as an obstacle.

More than a third (36 per cent) cited ‘issues with investment strategy’ as an impediment to endgame, while 32 per cent pointed to a lack of sponsor engagement and 26 per cent cited the new DB Funding Code.

General preparedness for a potential bulk annuity deal was also highlighted as a barrier by 26 per cent of the trustees surveyed, while 20 per cent cited attracting insurer interest and 18 per cent pointed to issues with data.

Standard Life managing director of DB solutions and reinsurance, Kunal Sood, noted that while improvements to DB pension funding levels have been welcomed, trustees were still facing key barriers when it comes to pursuing and executing their endgame strategies.

“External factors, such as the potential for a fall in gilt yields, present a risk to schemes that are not well hedged, as do challenges around any illiquid asset holdings the scheme might have,” Sood continued.

“Trustees do, however appear to be reacting to this challenge, with 40 per cent of trustees saying the recent changes in the market environment have prompted them to reduce their scheme’s allocation to illiquid assets as a priority.

“There should also be a greater emphasis on finding and choosing the right partner that supports schemes’ long-term objectives, especially as many trustees report concerns over a lack of engagement from sponsors and consider it a barrier to pursing their endgame strategy.

“We are not aware of any schemes that haven’t obtained a bulk annuity quotation, and we believe there is sufficient appetite in the bulk annuity market to service all those schemes that desire insurance. For our part, we are ready to engage with DB scheme trustees to help meet their overarching endgame strategies and secure member benefits.”

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