Run-on overtakes buyout endgame for large schemes
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Run-on has become by far the most dominant endgame for the largest defined benefit pension schemes, as seven in 10 plan to continue running their scheme, almost twice as many as a year ago, new research by mallowstreet suggests.
The Endgame & Surplus Report 2026, based on responses from 23 corporate DB schemes with over £1bn of AuM representing a combined £414bn, found that 70% of large DB schemes now target run-on, up from 38% twelve months earlier. At the same time, the proportion aiming for buyout has shrunk to a mere 4%.
A year earlier, just 38% of DB schemes planned to run on with the same proportion still undecided. A quarter (24%) aimed for buyout.
“This year’s research confirms a clear shift in mindset. For most large DB schemes, run‑on is no longer a debate, it’s a decision," said Brightwell’s chief executive Morten Nilsson. “But run-on isn’t without complexity. It requires a carefully considered strategy and execution plan.”
The change in direction for those planning to run on are mainly sponsor-led, the research suggests, as 60% cite a change in sponsor engagement or view as the most likely reason to change endgame, while 53% point to a change in covenant strength. For a third, funding improvements were also at play.
The pendulum could swing further towards run-on; among those not currently planning to continue, more than half (57%) say that regulations that make run-on more attractive could sway them to keep the scheme going.
Large proportion has multiple concerns over surplus release
Surplus release has become a key consideration for sponsors and some DB member groups as incoming rules are set to make this easier.
The research found that among those targeting run‑on, 20% can already release surplus, while 13% plan to take advantage of proposed legislation to enable surplus release. More than half (53%) are still undecided on this.
A significant proportion had concerns about releasing surplus, the main ones being:
- getting agreement on how to split surplus between employers and members (58%);
- difficulty in treating members fairly (58%);
- being underfunded in future (58%); and
- potential legal challenges from members (47%).
Ally Georgieva, head of Insight at mallowstreet, said that “the political expectation that surplus will flow freely back into the economy does not yet match the fiduciary reality. Trustees are asking a fundamentally different question to policymakers: not, ‘How do we release surplus’ but, ‘How do we ensure it is fair’? Until that question has a clear answer, hesitance will remain.”
Nilsson said: “Uncertainty remains around surplus release, but it’s early days and, as the legislative framework evolves and guidance is developed, confidence is likely to grow.”
