Defined benefit (DB) pension trustees are increasingly adopting a ‘run-in’ endgame strategy, whereby they use run-on as a transitional stage on the path to buyout, according to Aon.

The firm noted that while the UK risk settlement market had maintained its level of activity this year so far, it was set to increase significantly as several factors drive its expansion.

"After a relatively subdued start to 2026, activity levels in the UK pension risk settlement market are again starting to surge,” said Aon senior partner and UK head of risk settlement, Martin Bird.

“We are seeing a significant pipeline of transactions building across the market, including several very large schemes. We expect to see high transaction volumes up to the year-end and then on into 2027.”

Bird highlighted that the market was continuing to evolve amid strong funding positions and attractive insurer pricing.

This was resulting in trustees and sponsors taking a “very considered” approach to endgame strategies, with Aon observing ‘surplus deals’ being agreed that allowed trustees to lock in favourable balance sheet positions and secure members’ benefits.

"For many schemes now, the decision is no longer simply whether to run-on or buyout,” Bird stated.

“Instead, trustees are increasingly viewing run-on as a transitional stage on the path to an eventual buyout.

“This way they can use the additional time to build further resilience, improve member outcomes and maximise value.

“In effect, we are seeing a more controlled ‘run-in’ strategy starting to emerge.”

Aon senior partner, John Baines, explained that the “exceptionally attractive” pricing available from insurers was the most significant driver of pension risk transfer activity.

Pricing improvements over the past 12 months have been supported by strong competition and insurers’ growing access to sources of external capital, he added.

“With insurers actively seeking new business, many pension schemes are now able to consider opportunities that previously appeared out of reach,” Baine said.

"At the same time, the range of endgame options available to trustees continues to expand.

“Alongside traditional bulk annuities, schemes can now consider a broader set of solutions, including superfund transfers and capital-backed run-on models – all allowing them to pursue a strategy that is more closely in line with their objectives and circumstances.

“The bonus is that insurers are innovating to stay ahead of alternative competition – and that’s creating even more value for members and sponsors.”

However, as the number of options for pension schemes increases, decision making was becoming more complex, with trustees needing to assess a wider range of options, risks, and trade-offs.

“The key challenge is ensuring they have the right information, advice and governance framework in place to make those decisions with confidence,” Baines concluded.

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