Preparedness for buy-in or buyout remains at the forefront of defined benefit (DB) pension scheme trustees’ minds, with 28 per cent citing it as a key barrier to pursuing their endgame strategy, up from 26 per cent a year ago, research from Standard Life has found.

The survey also revealed a particularly "significant" increase in this figure amongst larger schemes, as this barrier was cited by nearly one-third (30 per cent) of trustees managing between £500m - £999.99m in assets, up from 18 per cent of trustees a year ago.

However, the results were broadly consistent for schemes of different sizes, as preparedness was also highlighted as a barrier by 27 per cent for trustees of mid-sized schemes (£250m - £499.99m in assets), and 29 per cent for trustees of smaller schemes (£100m - £249.99m in assets).

However, Standard Life found that trustees are responding by seeking specialist advice to help overcome the preparation barrier, as all (100 per cent) of trustees considering a buy-in or buyout have sought advice to evaluate and improve their scheme’s data administration processes, for example.

While the majority (64 per cent) found that no action was required as their data was in good shape, over one-third (36 per cent) have undertaken or intend to undertake a data cleanse - a process which typically involves correcting errors or filling identified data gaps.

Standard Life managing director of DB solutions, Kunal Sood, said, “Thorough preparation is essential for schemes looking to secure a successful BPA transaction and data quality plays a pivotal role in that process. Inadequate or inaccurate data can hinder an insurer’s ability to assess liabilities accurately or calculate buy-out pricing, creating roadblocks in the buy-in or buyout process.

"Additionally, issues such as incomplete member records, historical errors, and inconsistent data formats often necessitate time-consuming and costly remediation efforts.

“While general preparedness for endgame strategies remains a challenge, it’s encouraging that many trustees are being proactive and seeking guidance and advice ahead of approaching an insurer. In doing so, trustees will be best placed to evaluate and enhance their data quality, minimise barriers and strengthen their position.

"With evolving market conditions, prioritising preparation, and in particular, data readiness, this ensures a smoother transition and better outcomes for members. Accurate and well-maintained data is not just a technical requirement, it’s the foundation of a successful endgame strategy.”

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