As 2025 begins in earnest, we’ve been asking some of our experts what they think the year will bring for their service line and the pensions industry as a whole. Here’s their thoughts:

Mandy Kaur-Sadler, head of our large schemes service line

Q: Is buy-out still the optimal outcome? 

A: “An emerging trend, particularly notable among large schemes, is the consideration of whether buy-out remains the optimal endgame strategy.

Traditionally, many schemes aimed to accumulate sufficient assets to facilitate a buy-out. However, improved funding positions and some schemes being funded beyond the buy-out basis have opened the door to alternative strategies. These alternatives are especially relevant for open schemes, closed DB schemes with discretionary benefits, immature schemes, or those generating surpluses to support DC savings.

While running on may not suit every DB pension scheme, for those where it is a preferred option, establishing the right support structure is essential for the effective implementation of strategic plans. In 2025, we expect this trend will grow, with new innovative end-game solutions emerging beyond the traditional insurance buy-out.”

Q: Are there any upcoming events focusing on large schemes that you’d like to highlight?

A: “We are hosting a large scheme strategic issues immersive workshop on 20 March 2025. The workshop is targeted towards in-house pensions directors, managers and other in-house pensions individuals who may be involved in the strategic management of schemes. If you would like further information, please contact largeschemes@vidett.com.”

Katie Clegg, head of our adviser review and benchmarking service line

Q: What’s coming for the adviser review service line as we move into 2025?

A: “As trustees look to set and agree their budgets for 2025, we expect to see an increasing number of our clients looking to benchmark their fees against the market to ensure they remain competitive. We have a wealth of data we can utilise to support our clients with this.”

Kevin Dolan, head of our sponsor financial distress & restructuring service line

Q: Are there any upcoming or recently put into place regulations that will impact your area of expertise?

A: “It will be interesting to see how The Pension Regulator’s recently introduced Funding Code impacts generally on our area of work, as far greater emphasis is likely to be placed on employer covenant assessment and monitoring.”

Q: What challenges might pension scheme sponsors face in 2025?

A: “The budget in November 2024 raised business costs and will likely put upward pressure on inflation. The impact of this, together with stagnant UK growth, potential US tariffs and slower than expected central bank reduction in interest rates could cause issues across sponsors.”

Kevin Clark, head of our small schemes service line

Q: What are you and the small schemes team focussing on this year?

A: “The small scheme service line is focussed in 2025 on the small scheme solutions available to schemes in legacy insured products and DB master trusts where their unbundling will deliver better costs management and governance in their journey planning.”

Simon Lewis, head of our equity, diversity and inclusion (EDI) service line

Q: What’s an emerging trend in the EDI space?

A: “The use of strength-based assessments to evaluate board effectiveness and onboarding/selecting new trustees and working groups, as well as questioning trustees on their EDI effectiveness not just as a board but on day-to-day business to improve outcomes such as how meeting are run and understanding advisers.”

Q: How will you and the EDI team be supporting pension scheme trustees this year?

A: “EDI is a topic often best discussed outside usual trustee business meetings, and some trustees may not be employed and so do not have access to training in good practice. We would like to put in place standalone training sessions to groups of trustees from different schemes to share their views and experiences.”

As you can see, we’ve got a busy year ahead of us supporting pension schemes and helping to achieve the best possible outcomes for their members. If you’d like to speak to any of the experts featured in this article why not get in touch?

For further information on any of the above, please contact the relevant authors or their service lines