Defined benefit (DB) pension schemes should make sure they "tackle the tough questions" when deciding on their endgame strategy, LCP has stated

At its annual DB pensions conference, LCP said sponsors and trustees must embrace questions around trustee fiduciary duties and member perspectives, and fully balance the risks of what could go wrong against the potential rewards of any particular strategy.

LCP's Michelle Wright, Myles Pink, and Jonathan Griffith participated in the panel session, 'Forging gold standard endgame strategies - tackling the tough questions', at the conference.

They acknowledged that while endgame strategy could sometimes appear polarised and bring contrasting views, it was important for all stakeholders to 'grasp the nettle' and proactively decide on an endgame strategy rather than sleepwalk into one.

The panel highlighted possible misconceptions about trustees' duties, how stakeholders may look differently at the risks and opportunities of each endgame option, and what might go wrong.

This included potential areas of regret risk and how any decision may look with the benefit of
hindsight.

LCP reminded the audience that members must be at the heart of trustees' and sponsors' decisions about scheme endgame solutions.

LCP partner and head of pensions strategy, Michelle Wright, commented: "At times, endgame strategy can seem like a polarising topic, but it was clear from the panel discussion that it doesn't need to be.

"The choice of running on forever or fully insuring immediately is simply bookends to a whole spectrum of potential options available to pension schemes - a key decision is working out where on that spectrum you wish to sit."

LCP partner and head of endgame innovation, Jonathan Griffith, added, "It is crucial for trustees and sponsors to carefully consider all the tough questions.

"This means all schemes, irrespective of size, need to consider their objectives and risk appetite - what they aim to achieve, why these goals matter, how they'll reach them, and identify key milestones along the way. Ultimately, the endgame isn't just a finish line; it's a strategic journey."

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