Virtual Ideas Exchange

Our panel explored the key economic, geopolitical, and sector specific trends shaping employer covenant and DB pension scheme considerations in 2026 and beyond.

Our panel included Lord Gavin Barwell, who was formerly the Number 10 Downing Street Chief of Staff, who shared his analysis of the UK and Global economy and what this means for employer covenant as well as current geopolitical events –and how they may influence the Chancellor’s approach and broader implications for the covenant underpinning many pension funds.

We also heard from Sarah O’Toole, a partner in the PwC restructuring team, who provided an overview of the restructuring and insolvency market and highlighted which sectors were seeing particular stress and those that have growth opportunities.

Lastly Mark Jennings, PwC Pensions Employer Covenant and Restructuring Partner, considered what all of this means for DB pension schemes that remain reliant on covenant including how this is being addressed by the DB Funding Code and how best to manage covenant risk in such an uncertain environment.

Our panel explored the story behind the landmark Stagecoach / Aberdeen transaction, why it was pursued, how it was structured, and what it took to move from ambition to execution at pace from end to end.

Key takeaways from our panel were:

• Trustee led run-on innovation: Stagecoach/Aberdeen was a groundbreaking trustee led run-on outcome. All parties received extensive advice to support a high conviction to transact.
• No solution is risk-fee: The trustees diligently considered a wide range of options, with a clear understanding that a range of choices were very low risk, but no solution was risk free.
• Potential to set a precedent: This transaction has the potential to be a precedent for some others to follow. Our poll showed a range of views, with many seeing strong benefits for both members and the sponsor.

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Our panel panel discussed the industry’s journey with AI so far, showcased some real-life examples, offered the regulator’s perspective on responsible AI and highlighted the critical role of data in enabling safe and effective adoption.

Key insights from our panel and audience were:

• Engage with AI: Take small controlled steps to build confidence and learning
• Focus on purpose: Choose AI applications that clearly align with your scheme’s objectives
• Build readiness, not complexity: Focus on data quality, assurance and provider engagement before tools

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Our panel explored the landmark Pension Schemes Bill and its potential to reshape how surplus is managed in defined benefit (DB) pension schemes.

Key insights from our panel and audience were:

• Major Reform in Surplus Management: The Bill introduces flexibility for surplus release, removing long-standing legal hurdles and enabling reinvestment opportunities for employers.
• Early Action and Governance Are Essential: Although the Bill won’t take effect until 2027, companies are encouraged to assess its impact now, revisit endgame strategies, and develop clear, well-documented surplus release policies.
• Trustees Hold a Central Role: Trustees must evaluate the rationale for surplus release, ensure member protections, and maintain strong governance through covenant analysis, stakeholder engagement, and ongoing oversight.

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Our panel delved into the big challenge hitting the pensions industry - data! We focused on two key data challenges many schemes will be facing over 2025: pensions dashboards and buy-in to buyout.

Key insights from our panel and audience were:

• Despite significant challenges with Pensions Dashboards, conducting thorough work and supplier reviews is helping our clients gain confidence in sorting their data and connecting to the pensions dashboard ecosystem by their guidance staging dates. In fact, over 80% of our audience said they are very confident / confident they will meet the staging date for dashboards.
• However, we encourage our clients to keep up awareness of the user testing for pensions dashboards and plans for public launch and to work closely with their administrators to manage operational readiness. Our audience raised some interesting questions regarding the risks associated with potential delays in the pensions dashboard programme and how trustees can mitigate these risks. The most effective strategy is to prepare early and ensure progress is being made now.
• We asked our audience, how would they rate the quality of their scheme’s data?, to which only 6% said poor. Data quality is often assumed to be good until a project begins, revealing deficiencies and challenges. In our experience, overconfidence or assumption of data quality is a major factor in the buy-in to buyout challenge. We are helping our clients unblock their journey and secure members’ future by addressing these hurdles with innovative solutions and strategic focus.

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Our panel delved into the evolving UK pensions landscape under the new Labour Government, presented an overview of our analysis of the UK's Defined Benefit (DB) universe and shared our predictions for the industry's direction over the next 12 months.

Key insights from our panel and audience were:

• Our audience shared interesting questions about the future of the buy-out market, in particular how the new market entrants might influence competition and pricing. We expect the market will remain active, handling significant deal volumes with smaller schemes specifically benefiting from great choice as a result of increased competition. We anticipate that there will also be increasing interest in superfunds and alternative solutions as options for improving member security.
• We received some great questions on connecting to pensions dashboards. One in particular related to the risks associated with potential delays in the pensions dashboard programme and how trustees mitigate these risks. The most effective strategy is to prepare early and ensure progress is being made now. The rollout of the pensions dashboard will place an emphasis on data readiness and integration, with ongoing technological advancements presenting both opportunities and challenges for schemes.
• Looking ahead, there are significant developments on the horizon for Local Government Pension Schemes (LGPS) and Defined Contribution (DC) plans. However, interestingly, 78% of our audience felt that the policies highlighted in the 2023 Mansion House speech, if enacted, would not increase investment by DB pension schemes in UK productive assets. Trustees should continue refining their strategies to align with current regulations but remain vigilant for upcoming changes and of course we will keep you updated on our own engagement with Government and pensions policy makers.

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Our panel discussed pensions data complexities, AI utilisation, and pensions dashboard connection considerations.

Key insights from our panel and audience were:

• 45% of respondents expressed confidence in their pensions data, while a combined 50% faced challenges either in delivering data cleanse projects (25%) or relying on administrators for information (25%). Clear understanding of your data and a forward-looking strategy are essential for effective planning and achieving better outcomes.
• We received some great questions on connecting to pensions dashboards. One in particular related to how trustees can manage and assess the costs of these types of projects, which can be significant. These types of costs can be benchmarked, ensuring they align with the market and give you the right insight to make effective dashboard decisions.
• AI offers significant opportunities in the pensions industry for enhancing efficiency, precision, and insights. Our respondents highlighted that AI will improve day-today roles by boosting productivity and operational responsiveness as well as ensure we have reliable resources available to complete complex tasks. It was encouraging to see that 47% of our audience believe AI and GenAI will bring meaningful improvements to the pensions industry in the next 3-5 years. The sooner organisations consider how they can use AI responsibility, the sooner they can benefit.

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John Dunn, Katie Lightstone and Dwee Caleechurn from PwC, as well as guest panellist Lynne Rawcliffe from Law Debenture, covered the following topics: the proposed pensions reforms; the new funding regulations; and an update on risk transactions.

Our key closing messages were:

• There is a lot of change coming in 2024 and beyond. Early, collaborative engagement between trustees and sponsors will be critical, particularly for schemes with valuations in Q4 of this year or in 2025.
• Assessing the probability of members receiving full benefits incorporating the scheme’s position and sponsor’s cash flows is a new approach to choosing between the various end-game options, including run on, buyout or superfunds.
• Whether a Buy-in is Plan A or Plan B, no regret actions on data and benefits should be prioritised.

Key insights coming from our audience were:

• Not surprisingly, nearly 60% of those voting thought that it was too early to assess the impact of the proposed Mansion House Reforms on scheme strategy;
• 37% of participants intend to document buy-out as their long-term end game strategy but 45% will select run-on as a way of keeping their options open;
• Just over 30% of attendees voting thought that surplus should not be extracted from an ongoing DB scheme; of those that could contemplate it, a measure that combined funding level, covenant and investment risk was the most popular way of deciding how much to release; and
• You told us that the most significant challenges of implementing the new funding code would be assessing the timeframe over which there is ‘reasonable certainty’ over the sponsor's covenant (44%) and agreeing a low dependency funding target between trustees and sponsor (26%).

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Our focus for this session was Endgame strategies and employer covenant.

In an era of improved scheme funding and upcoming changes in the pension regulatory landscape, more schemes must now determine their endgame strategy. Ultimately this is a decision to change the covenant: either through moving it to a different party e.g. through a buy-out or superfund, or if changing then considering long term covenant reliance.

How do sponsors and trustees demonstrate which option is in all parties best interests?

Victoria Tillbrook, Lauren Baba, Anthony Rushworth, Chris Cockerill and Jeremy May explored the pros and cons of the spectrum of endgame strategies available and how you can assess and monitor the covenant of your chosen endgame pathway.

Key takeaways from this event include:

• It is a fascinating time for the pensions industry following the Autumn Statement and the raft of reforms for pensions that build on the announcements in the Chancellor's Mansion House speech, adding even more possibilities for what the future might hold.
• End-game strategy is one of the biggest decisions trustees and/or sponsors make. From our perspective what is really important is that when Trustees are setting their long term strategies they are appropriately assessing the covenant implications of the decision they are making, be that run off as is, augmenting the covenant through some sort of security or moving wholesale either to a superfund or an insurer.
• There are numerous and ever-increasing options available to schemes. All of this guides the initial strategy, but there's no guarantee it remains the most viable option. Market dynamics, such as changes in buy-out markets, can impact feasibility. Hence, part of this process involves having a contingency plan in place, understanding the alternative options, and knowing when and how to pivot if needed.

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Our focus for this session was the opposing directions that pension funds are being pulled towards; one, buoyed by dramatic improvements in funding levels, is towards insurers and the other, encouraged not least by the Government, is towards investment in productive assets, long-term surplus generation, and run off.

Clare was joined by John Dunn, Keira-Marie Ramnath and Matt Cooper to consider the latest data on where the UK’s defined benefit pension schemes are heading. What solutions are available in today’s rapidly developing market? And what methodology is available to support decision makers in weighing up the options and in picking the right road?

Key takeaways from this event include:

• Buy-out is still the ultimate goal for the majority of pension schemes: 60% of respondents to our live poll said they would buy-out if they were 100% funded on a buy-out basis. This is likely to be the preferred solution for smaller schemes, as well as for those with sponsors with weaker covenants.
• This leaves 40%, a significant proportion, who would choose to run on their scheme on and use any surplus generated to fund discretionary increases or to pay into a DC section. This is likely to be the preferred solution for larger schemes, and those with strong sponsors.
• The insurance market is very busy right now, so schemes may choose to (or need to) run on temporarily whilst they prepare for buy-out. Alternatively some schemes may choose to pursue a superfund solution. Matt shared his thoughts and answered your questions on these topics.
• Proactivity is key - trustees and sponsors should consider the pros and cons of the buy-out vs run-off dilemma for their specific circumstances. John and Keira shared their thoughts on the issues you should consider as part of this analysis.

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Our focus for this session was Risk Transfer, looking back on the pensions buy-in market over the first half of 2023 and discussing the key trends and learnings from what is shaping up to be a record breaking year.

Clare was joined by Matt Cooper and Dwee Caleechurn, Risk Transfer specialists at PwC, as well as Nick Chadha, Chief Operating Officer and Partner at PAN Trustees, who shared his Risk Transfer insights and experiences from a Professional Trustee's perspective.

As highlighted by our panellists during the event:

• The first half of this year has undoubtedly been eventful in the Pensions Risk Transfer market. We’ve seen significant activity in terms of the number of deals, record deals in terms of size, and new providers entering the market.
• An increase in demand has made it evident that insurers are facing a capacity crunch due to human capital constraints. This has resulted in insurers being more selective when deciding which pension schemes to quote for. 
• Based on our live poll in the session 1 in 5 audience members said that their pension scheme had struggled to get an insurer to quote, reflecting the more challenging market. 
• Trade readiness (data, benefits and investment actions prior to buy-in) is no longer a nice to have but essential. Schemes must prioritise and maintain trade readiness to get insurers engaged. 
• A collaborative approach to governance between the trustees and sponsors, potentially using a Joint Working Group, is in our experience the best approach to running a successful transaction.  
• In summary, the market is still very good right now with pricing better than it has been historically. Pension Scheme trustees and sponsors should focus on how they can stay nimble and flexible to take advantage of market opportunities as and when they arise.

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Our focus for this session was on “the today, the tomorrow and the future” of Defined Contribution schemes. With changes to auto-enrolment and new value for money requirements proposed by the Pensions Regulator, we took a look at the latest developments in the market and how providers are reacting.

Our live ChatGPT demo during the event considered how new technologies such as AI could drive innovation within the DC market, showing the possibilities and also limitations of this technology.

Clare was joined by Roshni Patel, Head of DC Pensions and Benefits at PwC, and Mike, Clare and Jason from her team who shared their insights in this area.

As highlighted by Roshni and our panellists during the event:

• A balance between both personal responsibility and joint responsibility is the key for preparation for tomorrow. As Mike shared, a cultural shift is required to change how pensions are viewed and for members to take ownership and plan their own retirement journeys, with support from their scheme sponsors and providers.
• Clare highlighted the number of perceived barriers to achieving pensions adequacy, including education and engagement. She talked through a number of actions we can all take into tomorrow to support members including:
  • Understanding your membership and adopting communication that works best for them (hyper-personalisation);
  • Considering a variety of communication methods to resonate with an increasingly diverse workforce; and
  • Highlighting pensions for example in onboarding documentation and within team meetings.
• Finally, looking forward to the future, Jason demonstrated the use of technology to harness member engagement with a human touch. This is critical, especially in the current climate. We should look to embrace and leverage new technologies like ChatGPT, to enable us to personalise content for individuals, increase accessibility to information and accelerate upskilling.

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In this session, our panellists discussed the 2022 LDI crisis and the bigger picture changes happening in the industry and the world. In particular looking at the challenges and opportunities this presents and what Trustees and Pension Managers should be doing as we move forward.

Our panellists were as follows:

• Sam Seadon - Head of Investment Strategy at PwC
• Nick Prouvost - Pensions Investment Specialist at PwC
• Emma Morton - Actuary and Director in the PwC Pensions team

As highlighted by our panellists during the event:

• Schemes should now be reviewing both their investment strategy and their investment governance arrangements. The world has changed significantly and taking a “wait and see” approach may lead to missed opportunities.
• We expect the new world to mean investment strategies are less leveraged, less costly and less complex - this is consistent with where funding status, regulation and investment conditions have got to.
• Implementing an appropriate investment strategy will need investment governance aligned to the strategy, it will be important that scheme stakeholders and those chosen to implement the strategy have the same vision.

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In this session, our panellists discussed the introduction of Pensions Dashboards from next April, in particular looking at the challenges and opportunities this presents, as well as sharing their views on the market and its state of readiness.  

Our panellists were as follows:

• Lucy Stone, Pensions Dashboards Business Lead at the Pensions Regulator. Lucy leads TPR’s work on pensions dashboards, from the provision of guidance to industry through to the development of enforcement processes ahead of duties going live.
• Peter Sparshott - Pensions Partner, Leader of Pensions Management Consultancy at PwC; 
• David Farmer - Pensions Governance and Legal Specialist at PwC; and
• Deborah Wilson - Pensions Governance and Tax Specialist.

As highlighted by our panellists during the event:

1. Having a clear and holistic project and stakeholder plan to ensure you meet your requirements ahead of your connection deadline should be a priority. This should dovetail with that provided by your Administrator.
   
2. Administrators are dealing with competing priorities stemming from mandatory legislative change as well as marked increase in business as usual activity, so early and meaningful engagement is going to be vital. Gaining insight into the analysis of the data they are performing and the process of matching is important, as is understanding what (and how many) exceptions will exist (e.g. ERI values not being available) and how they are proposing dealing with them and the likely increase in workload as Dashboards become used.
3. Administrators are incurring costs to comply with the requirements and these will be passed on to their clients. Whilst no Administrator has yet confirmed what the cost basis will be, early discussions relating to these implementation costs, as well as what costs may be incurred once Dashboards are live, should be on the agenda soon.

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Please visit our Pensions Dashboards website.

In this session our panellists discuss long-term funding targets and strategies for defined benefit pension schemes and the results of PwC’s 2022 Funding Survey.

As highlighted by our panellists during the event:

• PwC’s Pension Trustee Funding Index shows that the surplus in the UK’s defined benefit pension schemes reached a record high of £250bn in June. Read more here;
• Rising funding levels present opportunities for pension schemes to reassess their progress towards long-term funding targets;
• The most common long-term funding target in our survey was a level of funding that would allow the pension scheme to buy-out with an insurance company - in fact 2/3rds of schemes surveyed are either explicitly or implicitly targeting this level of funding;
• 80% of pension schemes expect to hit their long-term target in nine years or less - schemes that want to buy-out need to start preparing now;
• Trapped surplus has become a real issue but there are structures available to prevent this occurring.
  

Our panellists:

• John Dunn - Head of Pensions Funding & Transformation at PwC;
• Raj Mody - Global Head of Retirement & Pensions Consulting at PwC; and
• Brian Peters - Alternative Funding Vehicle Lead at PwC.

In this session, our panellists discuss the impact that innovation in the pensions and investment industry is having on how pension schemes progress along their journey plans. In particular, the need to consider:

1. How to get to your end destination; and
2. How to do this in the most cost effective way

Our panellists:

• Matt Cooper - Head of Alternative Pension Solutions at PwC
• Keira-Marie Ramnath - Director and Head of Investment Oversight at PwC
• Swapnil Katkar - Head of Pension Risk Transfer at PwC

In this session our panelists discuss two topics:

• Pension Schemes Act 2021: Notifiable events and proactive engagement; and
• Covenant pressures as a result of stresses and strains in the market

Chris Cockerill and Oliver Reece share their insights into these two areas. Chris is a Director at PwC who advises trustees, lenders and corporates to assess financial strength of employers and develop solutions which work for all stakeholders. Oliver is a Partner who leads PwC's pensions legal practice.

They are joined by a panel of specialists to answer your questions:

• Mark Jennings - Partner at PwC focusing exclusively on employer covenant and pensions restructuring
• Suzanne Duff - Partner at Womble Bond Dickinson advising both trustees and sponsors on all aspects of occupational pension schemes
• Susan Anyan - Professional Trustee at Capital Cranfield with over 20 years’ experience of working with and managing pension schemes

Our speakers:

• Raj Mody, Global Head of retirement & pensions consulting at PwC;
• Tony Burdon, from the Make My Money Matter campaign, calling for the responsible investment of the UK’s pension assets; and
• Liz Ramsaran, Senior Manager in our pensions team with a particular focus on supporting trustees and employers in incorporating responsible investment and ESG considerations into their schemes.

In this session, we provide an update to our November 2020 session, covering:

• How we’ve seen the industry react since the initial Lloyds judgment in 2018 and the latest Lloyds judgement in November 2020;
• Insights from an operational perspective, including what we see in practice and common pitfalls to avoid; and
• Practical advice for how schemes can start in order to implement a solution efficiently.

Our speakers:

• Gareth Henty leads our Northern pensions practice bringing more than 20 years’ experience across all areas of DB pensions with a particular focus on managing cost and risk.
• Mike Kippax leads our pensions technology team, focusing on data analytics, longevity and GMP. Mike led the work quantifying impacts after the first Lloyds judgment in 2018 and works on the strategic aspects of a number of implementation cases.
• Deborah Wilson is a hugely experienced Pensions Manager and governance specialist. She is known for the effective delivery and implementation of complex change projects as well as running cost effective and risk managed teams.

In this session we:

• Kick-off with an overview of some of the mega-trends and disruptors that will impact on the UK pensions and savings industry;
• Share our thoughts on the future of benefit provision in light of developing trends and focus on the practical steps you could take today to address these trends;
• Look at how changes to working patterns impact the way people want to save for their futures;
• Discuss the rise of interest from members in how their pension is invested;
• Consider the challenge of how best to educate employees on pensions, and ensure they understand their options and are able to retire how and when they want; and
• Discuss the continued move to master trust in the market, and why contract based arrangements may still be the right answer for some employers.

Our speakers:

• Paul Kitson is a Partner and Actuary with 20 years experience and led PwC’s Pensions and Savings Disruptions team - looking at how mega-trends and changes in technology may impact pensions and savings.
• Roshni Patel co-leads PwC’s DC Pensions and Employee Benefits team, with over 15 years experience in finessing how to demystify the pensions world. Her work is far from over...

Our speakers:

• Brenda Trenowden CBE is a PwC Partner within the people consulting practice and former Global Co-Chair of the 30% Club. Brenda helps clients with all aspects of workplace performance, culture and communication. Brenda has a particular focus on helping her clients to achieve better business performance by improving both the diversity and inclusiveness of their workforces.
• Jane Firth is the Head of Responsible Investment at Border to Coast Pensions Partnership, one of the largest public sector pension pools in the UK. She leads the development of Border to Coast’s Responsible Investment strategy across internally and externally managed assets.
• Jani Singh is a PwC Insurance and Consolidation Specialist and co-founder of the Diversity in Pensions forum. He discusses how D&I can be at the heart of pension operations and decision making, including looking at how to embed it to enhance value and effectiveness.

In this session we cover:

• GMP equalisation / conversion
  • How we’ve seen the industry react since the initial Lloyds judgment in 2018;
  • Insights from an operational perspective; and
  • Practical advice for how schemes can start in order to implement a solution efficiently.
• Operational efficiency
  • What we’re seeing in the market and what we’re doing with our clients around aspects of operational efficiency, and the impact this has on cost and customer experience;
  • Focussing on two key areas:
    • Technology and automation, and specifically how understanding operational demand can help you focus on important aspects of this at the right time; and
    • How we are seeing service delivery models change as a result of Covid-19.