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    What shall we do with DB pension surpluses?

    What shall we do with DB pension surpluses

    08 February 2024 Solutions, Video

    Paul Richmond, Deputy Head of Solution Design

    In this talk, Paul Richmond, Deputy Head of Solution Design at Insight, illustrates the relative risks of buyout, the practicalities of running on a scheme and opportunities presented by the distribution of a surplus.

    Key takeaways:

    • Surpluses can enhance pensions, enhance DC member contributions, reduce covenant risk, and offset performance impact from net zero targets.

    • A fully funded scheme on a gilts plus 0.25% basis which invests in a high quality credit portfolio can meet its liabilities over the next 25 years with a 99.5% certainty, according to the Government Actuaries Department.

    • Trustees should ask what is being gained and lost on a relative basis for both members and sponsors from either running on a scheme or from carrying out a buyout.
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