Many pension scheme trustees and employers aspire to undertake a risk transfer transaction, typically an insurance company buy-out for defined benefit (DB) schemes or a transfer to a master trust for defined contribution (DC) schemes. In each case, this will ultimately herald the termination of the pension scheme and an end to all governance systems. Recent improvements in scheme funding mean that some DB schemes are reaching that point earlier than expected. For example, what could have been a five-year path to buy-out may now be a two-to-three-year journey plan. 

This means that many trustees are now considering to what extent general code compliance needs to be factored into the end game. Does an effective system of governance (ESOG) need to be built regardless? With the first “own risk assessment” (ORA) not due until Spring 2026 (at the earliest), what needs to be done in relation to schemes that will have wound-up by then or those nearing the finish line?