Small Schemes and Endgame: Focus on Outcomes, Not Execution

Over the past three to four years, the pensions industry has made significant strides in opening up the insurance market to smaller schemes. Access has improved, processes have evolved, and insurers are increasingly willing to engage across a broader spectrum of transaction sizes.

That progress should not be understated, however challenges still persist – particularly for smaller schemes navigating the path to buy-in and buy-out. It’s a subject I spoke about at the recent Professional Pensions Endgame Summit, and these are some of my reflections.

The Reality and Complexity of Endgame Transactions

One point came through clearly: regardless of scheme size, the reality of endgame transactions has not fundamentally changed. There is still a substantial amount of work required, especially during the run-up to buy-in and buy-out. As professional trustees who understand the level of work involved, we have a responsibility to manage expectations, particularly with employers. A persistent misconception is that smaller schemes can move quickly simply because they are smaller. In practice, that is rarely the case. The operational and technical demands remain significant.

When we look at sub £100m transactions, the challenges are nuanced. The way data work is delivered, for example, can introduce risk and elongate timescales. Often, where administrators have not been involved in broking, business as usual admin teams take on this responsibility for the smaller schemes. Their historical knowledge is invaluable, but this is still a specialist task and should be treated as such. Without the right framing, there is a risk that the work does not fully align with what insurers require, which can result in a ‘doom loop’ of query logs.

Proportionality and Market Evolution

Another recurring theme is proportionality. There is a growing need to ensure that the level of effort matches the scale and complexity of the transaction. Encouragingly, we are seeing more pragmatic approaches emerge, whether that is direct insurer implementation of GMP equalisation, or more streamlined calculation methods. These are positive steps, but they require collaboration between trustees, advisers, and insurers to be effective.

Insurer engagement for smaller schemes also warrants attention. Many small schemes still operate on the basis that a single insurer approach is the only option. In my view, it increasingly feels outdated to assume a small scheme can only attract one insurer in an exclusive process. The market has evolved, and even micro schemes, with the right approach, can create a competitive process. Recent research by Aon highlights not only increased insurer competition for smaller BPA transactions in 2025, but a clear shift in market activity towards sub-£100m deals, with more insurers actively quoting in this space. While there may be scenarios where a limited process is the most appropriate, that should be a deliberate choice, not the default position.

Surplus, Objectives, and Member Experience

One of the more interesting discussions at the summit centred on surplus. In my view, the greatest value of surplus is not just financial, it is the time it creates. Time to resolve complexities properly, time to make considered decisions, and time to focus on outcomes that directly impact the members. That said, surplus only adds value if there are clear objectives in place. These objectives will vary. Some schemes may focus on financial outcomes, others on member experience, but what is critical is discipline. Throughout a transaction, it is important to keep asking, are we still delivering against what we set out to achieve? Too often, that clarity is lost as processes evolve.

Finally, member experience is becoming a more prominent part of the conversation for smaller schemes, and rightly so. These schemes do not have the scale to be able to leverage insurers into creating new services. However, as insurers build out their offerings for the increasingly competitive larger transactions, those benefits are beginning to filter down. Combined with the presence of surplus and a competitive insurer landscape, trustees are now in a stronger position to move member experience up the agenda for its decision-making process.

For me, that is one of the most encouraging developments. It reinforces the importance of setting clear transaction objectives from the outset, not just around price and execution, but around what good looks like for members.

The endgame journey for small schemes is no longer about simply getting a deal done. It is about doing it well and with intent.

If you’re considering your scheme’s endgame strategy or want to sense-check your approach to buy-in or buy-out reach out to our risk transfer team.

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