Small DB pension schemes need to be flexible to ensure insurance buy-out

The funding status for the UK’s 5,000-plus corporate defined benefit schemes continues to show that schemes, on average, have sufficient assets to ‘buyout’ their pension promises with insurance companies, according to PwC’s Buyout Index. Overall, the Buyout Index continues to show near record levels of funding with a surplus recorded this month of £215bn. However, the slight fall in the average estimate of the cost to schemes to ‘buyout’ their pension promises highlights the increased competitiveness of the buyout market, especially for smaller DB pension schemes.