juin 04 2025

DB Pension Endgame Options – Pensions Regulator Guidance

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The Pensions Regulator (TPR) has published guidance for trustees on new models and options for DB and hybrid pension schemes. While some of these are endgame options, the guidance also covers options for improving financial outcomes, scheme governance and security for members while the scheme is ongoing.

New models and options

The guidance covers scheme run-on and alternative arrangements. It explains the key characteristics of each option and sets out issues for trustees to consider when assessing their suitability, including potential benefits and risks. The guidance is not intended to be a comprehensive list of all available models and options. TPR emphasises that there is no “one size fits all” solution – the most appropriate option will depend on the scheme’s specific circumstances and there may be overlap between different options.

Running the scheme on

Running the scheme on may be an endgame strategy or an interim strategy to achieve a specific goal such as buy-out at a later point. The guidance considers the issue of surplus in ongoing schemes, particularly in light of the government’s planned reforms on surplus release (for more information, please see our legal update). It would be good governance for schemes to have a policy on surplus extraction, and a scheme being materially overfunded for a prolonged period, with no plan to distribute surplus, may indicate poor governance.

Alternative arrangements

In practice, many of the options listed under “Alternative arrangements” can be pursued in conjunction with run-on and/or in conjunction with one another. The alternative arrangements covered are:

1. Governance

  • Fiduciary management.
  • Appointment of an accredited professional trustee.
  • Appointment of an accredited sole trustee.
  • DB master trusts and DB multi-trusts.

2. Financial arrangements

  • Capital-backed journey plans.
  • Superfunds.

3. Insurance solutions

  • Longevity swaps.
  • Buy-ins.
  • Buy-outs.

Trustee duties

The guidance sets out TPR’s expectations of how trustees will approach the process of assessing options, and provides a non-exhaustive list of relevant factors that trustees should consider. For all options, TPR expects trustees (as a minimum) to:

  • Seek appropriate and proportionate professional advice.
  • Assess the impact of the option on the strength of the employer covenant.
  • Understand the extent to which the option entails any loss of trustee control and take appropriate advice to ensure compliance with their fiduciary duties.
  • Manage any conflicts of interest appropriately.
  • Conduct a full risk assessment of the option(s) that are more suitable for their scheme and how these risks can be mitigated.
  • Fully stress test the preferred option(s).
  • Understand if, and how, any arrangement entered into could be unwound and the potential implications of doing so.

TPR emphasises the need for trustees to regularly review the best way to deliver member benefits. It may be appropriate for trustees to change their chosen or planned arrangement in response to a change in their scheme’s circumstances, the wider market or economic factors, or where new, more appropriate and/or better value for money solutions become available.

What does this guidance mean for trustees?

It is a useful summary of the main models and options available to DB and hybrid schemes in the current market, and of TPR’s expectations around how trustees should assess these. Trustees should review the guidance and ensure they take it into account when assessing potential options for their scheme and when pursuing any of those options. There is a section at the end of the guidance with illustrative case studies covering some of the arrangements and setting out questions that TPR expects trustees to ask themselves when considering options.

How can Mayer Brown help?

In addition to advising generally on this guidance, Mayer Brown can advise trustees on:

  • The legal aspects of the models and options covered in the guidance.
  • Trustee duties when considering and entering into available models and options.
  • Scheme governance processes.
  • Timing and consideration of a policy on surplus release and what such a policy might look like.

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