Regulatory risk is a rising and continuing concern for defined benefit (DB) pension schemes, according to the Global Pension Risk Survey 2025/26 published by Aon.
The 2025/26 edition of the survey – which is published every two years – charts the actions, intentions and concerns of UK DB pension schemes.
It highlights that the risks faced by UK DB pension schemes have become increasingly complex, highlighting a greater need for careful prioritisation of risk and opportunities.
However, the relative severity of the risks that could threaten schemes’ ability to pay member benefits as they fall due, have changed since the last survey.
The results reveal that while investment returns remain the top concern for UK DB schemes, regulatory risk now ranks second, up from fourth in 2023.
Data and benefit risk emerged as a key priority, ranking above traditional concerns such as interest rate and inflation risk.
Concerns about longevity and covenant risk remain unchanged, ranking in third and seventh positions respectively, while liquidity risks have slipped to the bottom of the list.
“Those running pension schemes continue to face uncertainty as they grapple with new forms of volatility. While the macro-economic environment has remained challenging, the focus on pensions by consecutive governments has also led to increasing volumes of regulatory change,” said Matthew Arends, partner and head of UK Retirement Policy at Aon.
“It is therefore not surprising to see regulatory risk climbing high on the agenda and continuing to preoccupy both sponsors and trustees,” added Arends. “The survey results underscore the volume of new rules and regulations already required of schemes, but also that regulatory change is expected to continue.”
The UK survey had 230 responses, covering both DB and defined contribution (DC) schemes, from the relatively small, less than £100m, to the very large, over £10bn.
“It was surprising, given their importance and influence, to see interest rates and inflation significantly drop down the risk list,” added Alastair McIntosh, partner at Aon. “While the turmoil of the September 2022 mini-Budget is still fresh in many memories, improvements in funding levels have clearly shifted priorities. In a similar vein, as many schemes look to prepare for a future risk settlement transaction, liquidity is also less of a preoccupation for trustees.”
This year, 85% of respondents were from the private sector and 15 percent from the public sector.
Trustees, including professional trustees, accounted for 58% of the survey responses, with 31% of responses coming from pensions managers.
Comments