Questions around the “end game” for DB schemes dominate the pensions press at the moment. The amount of tax due on authorised surplus payments to employers reduced from 35% to 25% from 6 April 2024 and we await the outcome of a government consultation on options for DB schemes (which includes changing some of the rules around surplus extraction). Some schemes may be hitting the pause button on derisking plans until further options are considered. For other schemes, derisking plans continue to be firmly on the table, but full buy-out may not be achievable. Over the last few years, there has been an increase in the number of alternative options available for transferring the risks associated with DB Schemes to third parties that may better suit the circumstances of some schemes, their trustees and sponsoring employers. However, these can be complicated and expensive.
In the latest in our Pensions Life Hacks series I consider alternatives to buy-in and buyout and I offer my top tips for trustees who are in the early stages of considering an alternative approach.