The pursuit of endgame remains a key priority for pension schemes in 2026, as improved funding levels bring buyout and long-term run-off strategies within closer reach. Yet while scheme funding positions have strengthened, new research suggests that the governance environment around them has become significantly more demanding.
Regulatory developments such as the DB Funding Code are increasing governance expectations across the industry, whilst rising advisory and implementation costs are placing additional pressure on trustee boards.
Professional Pensions research surveying 142 pensions professionals, found that around half of schemes believe regulatory change has increased their governance investment workload, while nearly two-thirds report higher investment and implementation costs.
But these pressures are not being felt equally. Smaller schemes are more affected, often operating with fewer internal resources and less frequent governance cycles.
The cost of comfort
Rethinking investment governance in a new era of endgame
FOREWORD
1
Regulation: The impact of a new funding code
2
3
The cost of changing economics
Governance inertia: Why schemes resist change
Research breakdown
This report is based on the results of quantitative research run by Professional Pensions in February 2026. The online survey targeted the opinions of pensions professionals on the issue of scheme investment governance.
Methodology
“
There are cost pressures on trustee boards arising from new and evolving governance demands. However, where robust governance structures are already in place,
– Bobby Riddaway, professional trustee and managing director at HS Trustees
these requirements should feel manageable rather than overly burdensome.
part one
For many pension schemes, the journey towards endgame is now an investment and governance challenge too. While improved funding levels have strengthened scheme positions and accelerated buyout planning across the DB market, trustee boards are simultaneously operating within a more complex and demanding regulatory environment.
The introduction of the DB Funding Code, alongside wider governance requirements such as TCFD reporting, cyber resilience obligations and the Own Risk Assessment, is adding further layers of oversight, documentation and decision-making for trustee boards. At the same time, many schemes are becoming more mature, more cashflow negative and more operationally focused as they move closer to endgame objectives.
For some schemes, particularly smaller arrangements with limited internal resources, the cumulative burden of regulation, oversight and implementation is beginning to test how far traditional governance structures remain sufficient for the demands now being placed upon them.
Professional Pensions’ research shows half of DB schemes surveyed reported an increase in their investment-related workload following the introduction of the DB Funding Code.
Responses from pension trustees were broadly consistent across governance structures, however only a minority reported that the impact had been significant. Overall, 5% of schemes using only fiduciary management support said their investment-related workload had “increased significantly”, compared with 6% of schemes using only investment consultant support.
Find out more
Alongside increasing regulatory complexity, pension schemes are also reporting higher costs within their governance and investment arrangements. As schemes mature and move closer towards endgame, advisory, compliance and implementation costs appear to be increasing for much of the DB market.
Professional Pensions’ research showed 65% of respondents stating the cost of investment advice and implementation has increased in recent years, with 12% stating costs have increased significantly.
The cost of changing economics
part two
53%
However, the impact is not being felt evenly across the market. Smaller schemes face more pressure, with 76% reporting higher costs, compared with 59% of mid-sized schemes and 63% of large schemes.
This may reflect the changing economics of DB pension governance overall. Many smaller schemes are now subject to governance and regulatory requirements like those faced by larger arrangements, but they operate with fewer internal resources and a smaller asset base over which to spread fixed governance costs.
31%
12%
4%
Lower
About the same
Somewhat higher
Much higher
The research reported cost increases were broadly similar across governance models. Among schemes using only investment consultant support, 54% said costs were “somewhat” higher than a few years ago, compared with 53% of schemes using only fiduciary management support.
Meanwhile, 14% of schemes using only investment consultant support said costs were “much” higher, compared with 10% of schemes using only fiduciary management support.
“
I see boards tweaking their models as a result of their first ORA, and kicking the tyres on them.
— Bobby Riddaway, professional trustee and managing director at HS Trustees
They are finding that many of the policies are fit for purpose.
While the case for governance change may be strengthening, most pension schemes remain reluctant to make structural changes the research shows. For many trustee boards, introducing governance change late in the journey towards buyout or run-off may itself create additional implementation risk, cost and complexity.
At the same time, familiarity and long-standing relationships continue to influence governance decisions across the pensions market, even where formal market reviews or reassessments are relatively infrequent.
Professional Pensions’ research suggests this tension is becoming increasingly pronounced across the industry. Despite rising governance pressures, around 59% of respondents said they were unlikely to change their current governance arrangement, and that proportion remained broadly consistent regardless of whether schemes used only investment consultant support (60%) or only fiduciary management support (63%)
Governance inertia: Why schemes resist change
part three
The survey results suggest that many pension schemes operate within investment governance structures that have gone largely unchallenged for extended periods. While confidence in existing arrangements is high, formal market testing appears relatively limited.
Only around a third of schemes have conducted a formal selection process or market review in the past five years (31% for investment consultants and 35% for fiduciary managers). This is notable given the CMA’s recommendation that trustees periodically retender advisory and fiduciary mandates to ensure ongoing value for money and effective competition.
High levels of confidence in existing arrangements may partly explain this pattern. A combined 59% of schemes report being “very confident” that their current governance model remains fit for purpose, with a further 37% describing themselves as “fairly confident”.
However, even among these highly confident schemes, only a minority have undertaken recent market testing, suggesting that confidence is often formed without recent comparative benchmarking or external validation of value.
Moreover, data indicates that governance decisions are strongly influenced by relationship-based factors. The most cited drivers of provider selection are trustee comfort and understanding (66%) and existing relationship or familiarity (50%). This suggests that, alongside formal assessments of capability and cost, ‘softer’ factors continue to play a central role in governance decision-making.
These influences vary depending on governance structure. Investment consultancy mandates show higher reported influence of trustee comfort and existing relationships compare with fiduciary arrangements, with trustee comfort and understanding cited by 67% of schemes and existing relationships by 57%.
Governance inertia 2.0: Confidence but no competition
PART FOUR
Introduction
Regulatory changes
Resistance to change
Governance inertia
Cost pressures
Introduction
Regulatory changes
Resistance to change
Governance inertia
Cost pressures
Market agility
Market agility
5
Delivering market agility
4
Governance inertia 2.0: The dangers of confidence but no competition
Regulation: The impact of a more prescriptive regime
The research also identified several factors that could prompt greater openness to investment governance change in future. The most commonly cited drivers included improving risk management as schemes approach endgame, addressing regulatory or governance concerns, and achieving lower or more predictable costs.
Timing also appears to play an important role. Schemes within five years of buyout were less likely to change governance structure than those further from endgame when introducing structural change may itself create additional implementation risk.
“I empathise with a lower appetite to change governance models at later stages within an endgame scenario,” said Sarah Booth, associate director at Vidett.
Fiduciary management is known for its ability to respond quickly to changing market conditions. The survey results provide evidence that governance structure can influence the speed at which schemes act, particularly in periods of market volatility.
Most trustee boards operate on relatively infrequent decision cycles. For instance, nearly three-quarters of schemes meet quarterly, while only 10% meet more frequently. This creates natural limitations on how quickly decisions can be made through traditional advisory structures. The overall representation of meeting frequency was broadly reflected when broken down by respondent – those using investment consultants only met quarterly most of the time (71%) with 8% meeting monthly or more frequently
Once again, smaller schemes appear particularly constrained. Over a quarter of schemes with assets under £100m meet less frequently than quarterly, potentially limiting their ability to respond quickly to market developments. In practice, this may reflect resourcing constraints rather than governance weakness, as smaller schemes often face proportionally higher regulatory and administrative burdens.
Bobby Riddaway noted: “Investment agility can be increased if the governance burden is reduced.”
While differences are less pronounced in mid-range response times, the key divergence appears at the extremes; particularly the ability to act within a day versus delays measured in weeks. In volatile markets, even small differences in execution timing can have a meaningful impact on funding outcomes, especially where liability hedging or de-risking triggers are involved.
Trustee perceptions broadly support this pattern. Schemes using fiduciary management are more likely to agree that their governance structure enables timely responses to changing market conditions. 59% of fiduciary-managed schemes agree with this statement, compared with 53% of schemes using investment consultants only.
However, stronger agreement (rather than simple agreement) provides a clearer distinction: 45% of fiduciary-managed schemes strongly agree, compared with 38% of consultant-led schemes.
Delivering market agility
PART FIVE
How has the introduction of the DB Funding code affected the amount of investment-related work for your scheme?
% of DB scheme respondents
Increased significantly
Increased somewhat
No material change
42%
The data also indicates a divergence between schemes that have experienced increased governance workload and those that have not. Among schemes unaffected by the DB Funding Code, 45% described the investment advice they receive as “very manageable”. But among schemes whose workload has increased, that figure falls to 21%.
The findings suggest that while trustee boards are continuing to cope with growing governance expectations, increased regulatory demands are associated with increased complexity and resource-intensive for some schemes.
“It has added to regulatory burden at a time when dashboard, cyber and other issues are high up the agenda,” said Bobby Riddaway, professional trustee and managing director at HS Trustees. “And it is on top of TCFD which is handicapping many schemes between £1bn and £10bn.”
These findings suggest that the DB Funding Code is contributing to a broader accumulation of governance demands across the pensions landscape.
As schemes move closer to endgame objectives such as buyout or run-off, and as wider regulatory obligations continue to expand, trustee boards are increasingly having to consider whether traditional governance structures remain sufficiently agile, scalable and sustainable for the challenges ahead.
Kevin Wesbroom, professional trustee at Capital Cranfield, explains how this can also include an investment shift from growth to defence. However, steering from equities to fixed income can raise new complexities for schemes.
“It turns out there are lots of different types of bonds - trustee have to learn just what these direct categories of debt mean and that are the underlying return opportunities and risks,” said Wesbroom.
“Risks which might be far more subtle than just collapse of the sponsoring entity. Are these bonds just collateralised versions of one risk - like housing. This takes time if you are not going to buy into something you don't understand - like a Madoff plan or a Ponzi scheme.”
Compared with a few years ago, how would you describe the overall cost of investment advice and implementation for your scheme?
“
We have seen advisor fees increase as a result of work on the ORA and ESOG and this is a fixed cost that is having a
bigger impact, proportionally, on smaller schemes.
To what extent do you agree with the following statement:
"Our trustees spend an appropriate amount of time on investment decision-making, given their other responsibilities"
Increased workload
Same/decreased workload
Agree
Disagree
Strongly agree
46%
52%
2%
Which of the following would most encourage you to consider changing your investment governance model?
Regulatory or governance concerns
Better risk management near endgame
Lower or more predictable total costs
Clearer accountability for outcomes
Reduced trustee workload
Improved speed of execution
Sponsor encouragement
48%
44%
43%
33%
25%
24%
Overall, how confident are you that your current investment governance model remains fit for purpose today?
Very confident
Fairly confident
Not very confident
4%
37%
The data also suggests a relationship between mandate duration and review behaviour. Schemes that have retained their investment consultant for longer periods without review tend to exhibit higher levels of confidence in the arrangement, consistent with a potential status quo bias in governance decision-making.
In terms of market engagement, the survey shows that 31% of schemes reviewed their investment consultant in the past three years, compared with 31% who last reviewed the arrangement more than five years ago. Fiduciary management arrangements show a slightly different pattern.
59%
Which factors most influenced your scheme’s current choice of investment adviser or governance model?
Existing relationship / familiarity
Cost
Speed and efficiency of decision-making
Trustee comfort and understanding
66%
50%
48%
44%
Regulatory expectations
Recommendation from another adviser
Sponsor preference
18%
11%
9%
— Sarah Booth, associate director at Vidett
“
If I had to choose between the two I would vote for effectiveness every time. Familiarity is fine, but a cumbersome governance structure
— Industry repondent
can get in the way of getting to the right endgame.
How often does your trustee board formally review investment decisions?
This suggests that while both governance models are broadly viewed as responsive, fiduciary management may deliver greater confidence in the ability to act decisively when speed matters most.
The results also highlight a structural challenge for smaller schemes, which are approximately twice as likely as larger schemes to report slower response times during market volatility. This likely reflects a combination of limited internal governance resource, reliance on external advisers, and the practical constraints of coordinating trustee decisions between scheduled meetings.
Overall, the findings suggest that governance structure can play a meaningful role in investment agility. However, the advantage is most pronounced at the point of rapid execution rather than across all decision-making timelines, reinforcing the importance of governance design in enabling timely action in fast-moving markets.
In periods of market volatility, how quickly can your scheme typically make and implement investment decisions?
12%
IC Only
FM Only
“
An effective governance structure can support timely decisions and clear accountability, which is particularly important in dynamic markets. However, there is no single optimal approach; different governance models may be appropriate
depending on scheme circumstances and objectives.
— Sarah Booth, associate director at Vidett
51%
7%
The research also suggests that professional trustees may play an important role in shaping governance awareness and familiarity with alternative operating models.
Twice as many schemes with a professional trustee on the board (46%) described themselves as “very familiar” with fiduciary management, compared with 23% of schemes without a professional trustee.
Importantly, confidence in existing governance structures also appears closely linked to openness to change. Among schemes that said they were “very confident” their governance model remained fit for purpose, only 23% expected to review their arrangements within the next 24 months.
However, among schemes expressing lower confidence in their governance structure, this rose to 57%.
“
How do we protect the downsides? Does this require new investment approaches?
Can we separate out return seeking assets from protection assets?
— Kevin Wesbroom, professional trustee at Capital Cranfield
30%
On one level, this may reflect satisfaction with existing governance arrangements. For example, schemes that described themselves as “very familiar” with fiduciary management were among the least likely to reconsider their governance structure, with 69% saying their current arrangement works well. This suggests that direct experience of fiduciary management reinforces confidence in the model.
At the same time, there were signs that some schemes remain open to reassessing their governance arrangements. Among schemes using only investment consultant support, 37% said they expected to review their governance model within the next year or so, compared with 26% of schemes using only fiduciary management support. However, a greater proportion of schemes using only fiduciary management support said they were already in the process of changing governance arrangements (8%) compared with schemes using only investment consultant support (1%).
Among schemes whose workload has increased under the DB Funding Code, 98% agree or strongly agree that trustees spend an appropriate amount of time on investment decisions given their wider responsibilities: the same proportion as among those schemes unaffected by the Code.
However, schemes experiencing increased workload were less likely to strongly agree that trustee time is being allocated appropriately, suggesting that growing governance demands may increasingly be stretching trustee capacity.
“Smaller schemes are more exposed because they face broadly the same investment governance requirements as larger schemes but with far fewer resources to manage the additional costs and complexity, even allowing for proportionality considerations,” said Booth. “Similarly, access to certain investments such as illiquid assets and private markets may be limited due to schemes’ liquidity requirements and additional costs of more specialist advice.”
The research also suggests that, despite rising costs and governance complexity, most trustee boards report they are dedicating an appropriate amount of time to investment decision-making.
The findings suggest that as regulatory expectations continue to expand and schemes move closer towards endgame, trustee boards may increasingly need to assess whether traditional governance structures remain the most efficient and sustainable way to oversee increasingly complex pension arrangements.
“This is especially the case when considerable time and effort have already been applied to meeting current governance and regulatory requirements and where there are budgetary constraints.”
Ultimately, a scheme’s decision to run on or pursue endgame will also require significant changes from an investment perspective. Here, Wesbroom points to several key considerations that enter schemes’ investment planning as a result.
“If schemes are going to switch from an exit endgame to running on, then this should prompt a significant change in investment policy,” said Wesbroom. “[They will ask things like] if we now need to generate investment returns so that we can share surplus between members and the sponsor, how do we do this?”
When was the last time your scheme carried out a formal tender or market review of its investment advice or fiduciary arrangements?
Within the last 3 years
Between 3 and 5 years ago
More than
5 years ago
31%
31%
33%
Investment consultant/adviser
Never
26%
35%
35%
Here, 35% of schemes report having reviewed their arrangement within the past three years, compared with 26% who last undertook a review more than five years ago. While confidence levels remain broadly similar to investment consultancy arrangements, this suggests differences in timing of review activity between fiduciary and consultancy mandates.
In a DB environment characterised by ongoing cost pressures and increasing scrutiny of governance efficiency, reduced competitive engagement may limit price discovery and reinforce incumbent advantage.
In contrast, fiduciary management arrangements show a different balance, with trustee comfort cited by 58% of schemes and existing relationships by 34%. This suggests that while both models are influenced by familiarity, investment consultancy mandates may be more exposed to relationship persistence effects, whereas fiduciary management arrangements appear slightly more structured in their evaluation dynamics.
Very familiar
57%
Fairly familiar
Not very familiar
Not familiar at all
How familiar are you with fiduciary management as an investment governance option?
38%
46%
23%
21%
0%
12%
4%
74%
Quarterly
6%
Less than quarterly
10%
Monthly or
more frequently
Only when prompted by advisers
Against this backdrop, fiduciary management appears to offer some advantages in execution speed. Schemes using fiduciary managers report a greater ability to react rapidly to market movements. The survey shows that 21% of schemes using fiduciary management report that their provider can react within a day, compared with 12% of schemes relying solely on investment consultants. This difference suggests a real advantage in execution speed at the fastest end of the response spectrum.
In contrast, slower response timelines are more common among consultant-led models. 8% of schemes using investment consultants report response times taking longer than a few weeks. No fiduciary-led scheme made that claim. This indicates that fiduciary structures are more likely to support faster implementation of decisions, particularly in volatile market conditions.
10%
Overall, 142 participants completed the survey, the majority (66%) of whom were trustees. This research was undertaken by Professional Pensions in partnership with Charles Stanley.
At the same time investment advisers are playing an increasingly important role in helping schemes navigate investment complexity, risk management and endgame planning.
Yet despite these challenges and the need for a new approach to deal with the issues, relatively few trustee boards have formally reviewed or retendered arrangements with external partners in recent years. The findings suggest that familiarity, long-standing relationships and trustee comfort continue to exert a powerful influence over governance decisions.
Research into the different governance models, in particular investment consulting and fiduciary management, highlights a growing tension at the heart of pension governance investment when it comes to endgame, and whether the comfort and familiarity of existing arrangements may ultimately come at the expense of agility, oversight and effective decision-making.
Professional trustee on board
No professional trustee on board
33%
65%
2%
You may select up to 3 options
Fiduciary manager
How manageable do you find the volume and complexity of investment advice you now receive?
Increased workload
Same/decreased workload
Very manageable
Quite difficult to manage
Fairly manageable
45%
21%
48%
7%
75%
4%
65%
15%
8%
21%
66%
13%
Same day
Longer than a few weeks
Within a few weeks
Within a few days
We may review our model in the next 1–2 years
37%
We are actively considering alternatives
2%
Our current model works well; no change likely
60%
We are in the process of changing governance arrangements
1%
Which best reflects your current view?
26%
3%
63%
8%
IC Only
FM Only
You may select up to 3 options
We are operating in a period of rapid and sustained change. The way we work and make decisions has been reshaped by hybrid working, advances in AI, and the pervasive influence of digital communication. These shifts haven’t occurred in isolation; they have coincided with a period of profound transformation within the defined benefit pensions landscape.
Over recent years, the industry has experienced significant regulatory and structural change. Strengthened governance expectations, increased scrutiny, and the evolving “endgame” framework – reinforced by developments such as the 2026 Pension Schemes Act – are redefining how schemes plan for their future. At the same time, consolidation among schemes and advisers continues to accelerate, reshaping the competitive and operational environment.
Against this backdrop, this research – conducted in collaboration with Professional Pensions –seeks to explore how these developments are affecting investment governance, with a particular focus on smaller schemes, where resources and capacity are often constrained.
The findings highlight a clear tension. Schemes face mounting governance demands and cost pressures, yet meaningful change is often slow, even in the face of regulatory prompts such as CMA recommendations.
In this context, fiduciary management continues to play an important role. It offers trustees a means of managing increasing complexity, easing governance burdens, and enabling faster, more effective responses to market dynamics. This is particularly important for schemes as they move closer to their chosen endgame.
PARTNER INSIGHT
Senior Portfolio Manager, Raymond James | Charles Stanley
Chris Haywood,
