Professional Pensions: Ian Mills discusses the benefits of run-on

Ian Mills, Partner and Head of DB endgame strategy, recently featured on Professional Pensions webinar to discuss the benefits of running on your scheme. 

What will you learn?

Improvements in DB scheme funding levels, alongside expected government actions to ease restrictions on surplus use, are prompting more schemes to consider run-on strategies rather than moving immediately to insurance solutions like buyins or buyouts.

In March 2024, the government launched a consultation on DB scheme options to address barriers to run-on, and in January, the Prime Minister Keir Starmer and Chancellor Rachel Reeves confirmed plans to relax rules around how surpluses can be used. This could allow schemes to invest for longer and generate significant surplus returns.

Industry modelling suggests run-on could unlock substantial surpluses over a decade, which could benefit both members - through discretionary pension increases or lump sums - and sponsors, who might receive refunds or use surplus to subsidise the cost of providing pensions to their employees.

In this panel, Ian Mills and the other experts on the panel discuss:

• how run-on strategies could work in practice;
• key considerations for trustees and sponsors;
• the potential ways in which sponsors could extract the surplus;
• the benefits and drawbacks of such strategies compared to insurance-based solutions such as buy-in and buyout;
• legal and regulatory hurdles to a run-on approach; and
• investment strategies schemes adopting a run-on could utilise.

See more on the Professional Pensions website.