Aging populations and falling birth rates are placing mounting pressure on pension systems worldwide. In Europe alone, the dependency ratio is expected to climb sharply over the next two decades, threatening retirement adequacy and prompting governments to raise pension ages and reduce benefits.

At the same time, global retirement systems are transitioning toward defined contribution pension strategies, leaving defined benefit (DB) plans to increasingly operate as legacy arrangements. Regulatory reforms are also sweeping across markets, often centralizing governance, accelerating consolidation or enabling pooled arrangements. For employers, this creates dual pressure: Maintain member outcomes while controlling costs and simplify the management of legacy DB plans as their importance reduces over time.

Against this backdrop, proactive endgame planning — or “the last mile” of the pension scheme as it is often referred to in the U.S. — is no longer optional but essential.

The UK and U.S. have led the way, with employers closing pension plans and systematically derisking their portfolios over the last decade. The attention now turns to countries that are only just beginning to enter the endgame phase.

Defining the Endgame: Evolving Strategies

Across the most mature DB pension markets, three endgame strategies are well-established:

1. Buyout (Risk Transfer to Insurer): Serving as the most common strategy in mature markets, this involves transferring all DB liabilities to an insurer through a buy-in or full buyout. In the UK, 52% of schemes are aiming for buyout as soon as it becomes affordable, while in the U.S., 32%1 of plans cite full termination as their long-term goal.
2. Long-Term Run-On (Hibernation): These schemes continue indefinitely with a focus on long-term stability and risk reduction. This approach is favored in markets with less-developed insurance solutions. Sixty percent of U.S. plans and 18% of UK schemes expect to remain in long-term run-on.
3. Flexible Run-On: This takes a hybrid approach where there is a flexible “run-on” of operations — continuing to operate the scheme for a period while retaining the option to buy out when conditions are favorable (e.g., surplus usage or better pricing) — before a full buyout. Around 8% of U.S. plans and 22% of UK schemes pursue this approach.2

Regulation and local market infrastructure heavily influence these strategic choices. Many global sponsors are borrowing learnings from the U.S. and UK’s experience reducing pension risk, using tools like buyouts, lump sum options and annuities.