Hymans Robertson identifies potential gains of up to 15% for pension members, as new consolidation models demonstrate how investment returns can be shared.
Defined benefit (DB) pension schemes could improve member outcomes by as much as 15% by adopting run-on strategies, creating opportunities to retain private markets investments and generate additional surplus rather than pursuing immediate insurance buyout.
Research from Hymans Robertson suggests that schemes choosing to run on could unlock substantial value by aligning their investment strategies with the period over which they intend to retain their assets.
Its latest Excellence in Endgame paper introduces the concept of a ‘value horizon’, the point beyond which the economic benefits of continuing to run a scheme become unattractive.
The consultancy argues that trustees and sponsors should agree their objectives for surplus generation and distribution before determining an appropriate investment strategy, including their approach to private markets and hedging.
Ross Fleming, partner at Hymans Robertson, says: “The scale of the surplus value that could be unlocked by schemes cannot be underestimated, with an increase of up to 15% available in some situations.”
For a £500m scheme, Hymans estimates that running on could potentially generate £150m of surplus value, providing opportunities to improve member benefits and return capital to sponsoring employers.
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Putting run-on into practice
The potential for investment returns to enhance member benefits is already influencing DB endgame transactions.
In December 2025, Aberdeen agreed to become the sponsoring employer of the £1.2bn Stagecoach Group Pension Scheme, allowing it to continue running on rather than pursuing insurance buyout.
The agreement provides an initial pension increase of approximately 1.5% and improved inflation protection for more than 22,000 members, together representing over £50m of the scheme’s existing surplus.
Most future distributed surplus will also be earmarked for members, with Aberdeen receiving a minority share.
The arrangement allows the scheme to continue investing in productive assets, potentially including infrastructure, private credit and real estate, with the prospect of further pension increases as surplus emerges.
Aberdeen chief executive Jason Windsor said at the time that the agreement “provides the opportunity to enhance member benefits by investing in productive assets”.
The transaction follows Aberdeen’s earlier decision to run on its own £2.6bn DB scheme, reflecting growing interest in retaining pension assets to generate additional value.
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Consolidators embrace run-on
Simon True, chief executive of Clara Pensions, told PMP that the superfund developed a competing proposal for the Stagecoach scheme based on a similar principle of sharing investment gains.
Clara’s proposed ‘value share’ structure involved running the scheme on for a minimum of 12 years, with an entry price higher than its conventional superfund offering but below the cost of insurance buyout.
As surplus emerged, members would receive enhancements to their benefits.
“We saw very similar benefits to members on that transaction to those in the Hyman Robertson report,” True says. “And we will be doing transactions like that in future.”
Although Clara did not secure the Stagecoach transaction, True expects longer-term run-on arrangements to become part of its offering, complementing its existing model of consolidating schemes before transferring their liabilities to insurers.
He argues that successful run-on requires two conditions. Firstly, sufficient scale and investment expertise. And secondly, a clear purpose for generating surplus, whether improving member benefits or returning capital to sponsors.
“It’s the ones that are very well-funded [that are suitable for running on],” he says. “It makes sense to run on when you have sufficient scale and expertise.”
Private markets can play a role in generating a surplus, although True emphasises that scale is essential to diversify investment risks and manage illiquid assets effectively.
Clara’s existing private markets vehicle allows investments to be retained across pension scheme sections, potentially reducing the need for forced disposals as individual schemes approach buyout.
Nevertheless, True agrees with the principle that there is a limit to how long running on remains economically attractive.
“We will run sections on for longer at a higher entry price point than the normal Clara offering,” he says, adding that eventually it becomes uneconomic to continue.
The emergence of these arrangements suggests that the distinction between run-on and consolidation is becoming less rigid, with different providers developing ways to combine investment flexibility, economies of scale and surplus sharing.