Pension Risk Transfer Costs Rise Slightly in March
Event summary
- Milliman's Pension Buyout Index (MPBI) shows competitive pension risk transfer cost increased from 100.5% to 100.9% of accounting liabilities in March 2026.
- Average annuity purchase cost across all insurers rose 30 basis points, from 103.6% to 103.9%.
- Competitive bidding process estimated to save plan sponsors about 3.0% of PRT costs as of March 31, 2026.
- LIMRA reported $48 billion in pension risk transfers for 2025, the fourth consecutive year exceeding $45 billion.
The big picture
Pension risk transfers continue to be a significant market, with 2025 volumes exceeding $48 billion. The slight cost increase in March suggests potential volatility in annuity purchase rates, though competitive bidding remains a cost-effective strategy for plan sponsors. Milliman's analysis highlights the ongoing shift towards de-risking pension liabilities through insurers.
What we're watching
- Cost Trends
- How sustained cost increases will affect plan sponsor decisions on pension risk transfers.
- Market Dynamics
- Whether competitive bidding can maintain its estimated 3.0% savings for plan sponsors.
- Industry Growth
- The pace at which pension risk transfer volumes will grow following strong 2025 results.
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