What is a defined benefit pension run-on?

It's running the scheme indefinitely post-maturity, paying benefits from assets, extracting surpluses — no buy-out needed.

How to extract surplus in DB pension run-on?

Set triggers (e.g., 110% funding), rates (graduated), recoveries (deficit top-ups), and share mechanisms. Stress-test via stochastics.

Run-on vs buy-out: which is better for pensions?

Run-on offers flexibility and cost savings if risks managed; buy-out transfers them fully, pricier but certain.

🛡️ InsurTech

Pension Run-Ons: £3bn Scheme's Surplus Gamble Exposed by Models

A £3 billion defined benefit pension scheme, funded at 105%, faces stark choices in run-on mode. Ortec Finance's projections show net returns swinging wildly — surplus grabs versus deficit hits.

theAIcatchup Apr 10, 2026 4 min read

Chart of stochastic NPV outcomes for £3bn DB pension scheme in run-on scenario

⚡ Key Takeaways

strong surplus frameworks with triggers, graduations, and recoveries are non-negotiable for run-ons. 𝕏
Stochastic modeling reveals NPV volatility — balance liquidity and yield via CFDI. 𝕏
Risks persist with trustees; flexibility tempts, but 2008 echoes demand caution. 𝕏

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theAIcatchup

Markets. Money. Innovation.

#Ortec Finance #defined benefit pensions #pension run-on #surplus extraction

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Originally reported by Fintech Global

⚡ Key Takeaways

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