Buyout Series:

the six steps to buyout

Despite recent market volatility, a combination of strong longer-term returns across risk assets, company contributions and latterly, real interest rate increases have resulted in improvements across the funding levels of many defined benefit pension schemes.

With the endgame now in sight, trustees have begun to turn their attention to what a suitable target might be and how to get there.

For many schemes, buyout is seen as the ultimate endgame objective. But how do you decide whether it’s right for your scheme and what are the next steps once you have?

In this blog series, we’ll be guiding you through the six steps to buyout, covering:

Step 1: Deciding whether buyout is right for your scheme

Step 2: Monitoring your progress towards buyout

Step 3: Getting your portfolio buyout-ready: LDI

Step 4: Getting your portfolio buyout-ready: Growth assets

Step 5: Monitoring your progress to buyout

Step 6: Transacting a buyout

Step 1: Deciding whether buyout is right for your scheme

There are a lot of decisions to make as a pension scheme trustee, and one of the most important for closed schemes is deciding on your scheme’s ultimate endgame objective: buyout, low dependency, or something else.

But how do you decide what is right for your scheme and its stakeholders?

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