Run-on has emerged as the dominant endgame target for large defined benefit (DB) pension schemes, ‘decisively’ beating out buyout as the most popular option, research published by Brightwell has shown.

The analysis, conducted in partnership with Mallowstreet, found that 70 per cent of DB schemes with over £1bn in assets under management were targeting run-on, almost double the 38 per cent a year ago.

Meanwhile, the proportion of large DB pension schemes that were targeting buyout had ‘collapsed’ to just 4 per cent.

Last year’s survey found that 38 per cent of these schemes were planning to run-on, 38 per cent were undecided, and 24 per cent were targeting buyout.

Brightwell noted that, 12 months on, there had been a notable shift in direction, with improved funding positions and stronger covenant confidence giving schemes the assurance to retain assets and pursue surplus over the long term.

Among the large DB schemes changing endgame target to run-on in 2026, 60 per cent cited a change in sponsor engagement or view as a reason, while 53 per cent pointed to a change in covenant strength and a third cited a change in funding position.

Of the schemes not targeting run-on, 57 per cent said they could be persuaded by regulatory change that made run-on more attractive.

A fifth (20 per cent) of large DB schemes targeting run-on said they could already release surplus, while 13 per cent planned to take advantage of the new legislation in the Pension Schemes Bill to enable surplus release.

However, the majority (53 per cent) remained undecided on taking advantage of surplus release.

More than half (58 per cent) of large DB schemes were concerned about agreeing on how surplus should be used between employers and members, while the same proportion cited worries about difficulties in treating members fairly, and the risk of paying a surplus and being underfunded in future.

Almost half (47 per cent) of large DB schemes pointed to concerns about potential legal challenges from members.

“This year’s research confirms a clear shift in mindset,” said Brightwell CEO, Morten Nilsson. “For most large DB schemes, run-on is no longer a debate, it’s a decision.

“The combination of stronger funding, new surplus rules and a supportive policy environment have fundamentally changed the art of the possible for DB endgames. But run-on isn’t without complexity. It requires a carefully considered strategy and execution plan.

“Uncertainty remains around surplus release, but it’s early days and, as the legislative framework evolves and guidance is developed, confidence is likely to grow.”

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