Nearly half of UK finance leaders believe transferring defined benefit pension responsibilities could free up time for core business priorities. With funding levels improving, CFOs face new decisions over pension risk, governance costs and long-term financial strategy.
Nearly half of UK finance leaders believe transferring responsibility for defined benefit pension schemes could free up time for core business priorities, as stronger funding positions create new strategic choices for employers.
Defined benefit (DB) pension schemes continue to place significant demands on UK finance functions, despite improving funding levels. New research from Standard Life reveals that 48% of senior finance leaders believe removing responsibility for their scheme’s governance and funding would allow them to concentrate more on core business activities.
The research, conducted among 100 senior finance decision-makers at UK businesses operating DB schemes, found that nearly three-quarters (74%) described the management time associated with their scheme as significant.
For CFOs balancing investment priorities, financial transformation and business performance, the findings raise questions about whether retaining long-term pension liabilities remains the best use of financial and management resources.
While stronger funding has eased financial pressures on sponsoring employers, DB pension schemes continue to require considerable oversight.
According to the research, 46% of finance leaders described their pension scheme as a regular financial agenda item, while 42% said it remained a recurring board-level focus.
The potential benefits of transferring responsibility extend beyond management capacity. Some 37% of respondents believed removing scheme responsibilities would simplify operations and internal processes, while 35% anticipated reduced demands on senior management time.
However, these findings reflect perceived benefits rather than realised savings, with the research not quantifying how much time or expenditure businesses could recover.
The findings come as UK DB pension schemes have experienced substantial improvements in funding levels.
The Pensions Regulator’s 2026 funding analysis found that 67% of schemes in its latest valuation cohort reported a surplus on a technical provisions basis, compared with 39% at the previous valuation cycle.
More recent estimates suggest funding conditions have strengthened further, although a surplus measured against technical provisions does not necessarily mean a scheme has sufficient assets to complete an insurance buyout.
For employers, improving funding positions have shifted the conversation from managing deficits towards evaluating long-term options, including continuing to operate their schemes or transferring liabilities to insurers.
Claire Altman, Managing Director for Pensions Risk Transfer and Individual Retirement at Standard Life, said: “For many businesses, DB pension schemes remain one of their most significant responsibilities.”
She noted that improved funding levels now give sponsoring employers greater flexibility to assess whether retaining responsibility or pursuing an insurance solution best supports their business objectives.
Transferring pension risk can reduce long-term funding exposure and management demands, but the decision involves significant financial trade-offs.
An insurance buyout can ultimately transfer pension liabilities to an insurer, while continuing to operate a well-funded scheme may offer greater flexibility and potential access to future surpluses.
The Pension Schemes Act 2026 introduces greater flexibility for surplus extraction, subject to safeguards and further regulations. This could influence how employers assess the value of retaining their schemes.
For CFOs, the decision requires balancing insurance costs, future funding risks, governance expenditure and opportunities to redirect management resources towards business priorities.
Standard Life’s findings suggest pension endgame planning is becoming as much an operational efficiency question as a financial risk decision.
With funding positions strengthening, finance leaders have greater scope to assess whether the capital and management attention committed to DB schemes could deliver more value elsewhere in their organisations.