Milliman analysis: Competitive pension risk transfer cost decreases to 100.8% during May

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). During May, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process dropped from 101.1% to 100.8% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.8% of a plan’s ABO.

The competitive bidding process is estimated to save plan sponsors about 3.6% of PRT costs as of May 31, 2025.

Share

During the same time period, the average annuity purchase cost across all insurers in our index increased from 104.1% to 104.4%. The competitive bidding process is estimated to save plan sponsors about 3.6% of PRT costs as of May 31, 2025.

“First quarter PRT results were published by LIMRA earlier this month, and the $7.1 billion in new premium sales was significantly lower than last year’s Q1 results of $14.6 billion,” said Jake Pringle, Milliman principal and co-author of the MPBI. “With the MPBI under 101% and increased insurer capacity so far in 2025, this may be a good time for plan sponsors considering a buyout to take advantage of competitive PRT pricing.”

The MPBI compares the FTSE Above Median AA Curve to the annuity purchase composite interest rates from nine insurers to estimate the competitive and average costs of a PRT annuity de-risking strategy. Individual plan annuity buyouts can vary based on plan size, complexity, and competitive landscape.

View the complete Milliman Pension Buyout Index. To receive regular updates with Milliman’s pension buyout analysis, contact us at pensionbuyout@milliman.com.

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at milliman.com.