Pension Risk Transfer Costs Drop Sharply in April, Signaling Market Shift

Event summary

  • Milliman's Pension Buyout Index (MPBI) shows competitive pension risk transfer (PRT) costs fell 80 basis points in April, from 100.9% to 100.1% of accounting liabilities.
  • Average annuity purchase cost across nine insurers dropped 50 basis points, from 103.9% to 103.4%.
  • Competitive bidding saves plan sponsors ~3.3% of PRT costs as of April 30, 2026.
  • Annuity purchase interest rates rose more than accounting rates, driving the cost decrease.

The big picture

The sharp decline in PRT costs reflects broader market volatility in pension de-risking strategies. As annuity purchase rates outpace accounting rates, plan sponsors may accelerate risk transfer activity. The 3.3% savings from competitive bidding highlights the growing importance of insurer selection in cost management. This trend could reshape the $X trillion pension risk transfer market, where Milliman tracks ~$Y in annual PRT activity.

What we're watching

Market Momentum
Whether the mid-Q2 pickup in PRT activity will sustain through year-end.
Rate Dynamics
How the gap between annuity purchase interest rates and accounting rates evolves.
Deal Flow
The pace at which scheduled PRT deals settle in H2 2026.

Related topics

Financial Services Insurance