• More than half of (51%) trustees considering buyout explored in-specie transfers or secondary market sales in managing illiquid assets
  • Deferred premiums and sponsor loans continue to feature, explored by 26% and 17% of trustees, respectively

Over half of UK defined benefit (DB) pension scheme trustees are exploring in-specie transfers or secondary market sales to manage illiquid assets during buyout planning, according to new research from Standard Life*.

The findings, based on research among 100 DB trustees overseeing schemes with assets of £100m or more*, signal a shift in how schemes are preparing for the more complex elements of their endgame journey.

Trustees broaden their approach to illiquid asset management

Options such as in-specie transfers and secondary market sales have become leading options for over half (51%) of trustees considering buyout to improve transaction certainty and timing. This trend reflects growing demand for flexible, cost-effective solutions as schemes scrutinise illiquid portfolios more closely.

In addition to in-specie transfers, trustees are also considering strategies including deferred premiums (26%) while almost one fifth (17%) are assessing sponsor-backed solutions as part of a broader strategy to manage illiquidity during buyout planning.

Scheme size also influences preferred solutions. Schemes under £1bn are more likely to favour passing assets in-specie to insurers as part of buyout planning, while larger schemes lean toward secondary market sales—76% of those over £1bn cite this as their most favoured choice.

Selective processes and regulatory considerations shape feasibility

Regulatory requirements play an important role in determining which assets can be transferred and under what conditions limiting the application of in-specie transfers . Insurer appetite also varies based on the nature and performance of the underlying assets.

For many schemes, in-specie transfers are likely to form just one component of a broader strategy. Trustees continue to weigh liquidity, valuation certainty, and timing, as early engagement is critical - delays may lead to a narrower set of viable options in the lead up to a transaction.

Trusted guidance remains essential as schemes navigate increasing complexity

The findings underscore the importance of strategic planning and robust governance for schemes looking to transact in a timely manner. With illiquid assets remaining one of the most complex elements of buyout preparation, trustees are increasingly seeking informed and early guidance to help shape their approach. Many insurers are happy to have early conversations to help guide schemes and their advisers.

The absence of preparation and strong counsel can cause hold-ups in transacting, and with market activity expected to remain elevated and insurer capacity fluctuating over time, the cost of delay is becoming more evident. Schemes that prepare early and engage proactively will be best placed to secure insurer interest and maintain momentum as they progress towards buy-in or buyout.

Claire Altman, Managing Director of Pension Risk Transfer & Individual Retirement, said: “Managing illiquid assets remains one of the most challenging aspects of preparing for buyout, and trustees across the industry are considering a wide range of approaches to navigate this complexity. While in‑specie transfers and secondary market sales can play a role for some schemes, they are just part of a broader toolkit that trustees are exploring.

“The feasibility of any solution depends on a variety of factors - from insurer appetite to the characteristics of the underlying assets and the regulatory requirements that govern what can be transferred. This is why early engagement is so valuable, and trustees recognise the importance of understanding the full menu of options available to them, rather than relying on any single route.

“As the market continues to evolve, schemes that prepare early and take a holistic view of their illiquid assets will be best placed to secure insurer interest, maintain momentum and achieve a smooth, beneficial transition for their members. An external perspective can often add value and we’re always happy to act as a sounding board and support trustees as they begin this process.”

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Notes to editors:

Research conducted by Professional Pensions on behalf of Standard Life in August 2025 amongst 100 DB Pension Scheme Trustees, of Schemes larger than £100m.

 

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