Pension Risk Transfer Costs Hold Steady Despite Increased Buyout Activity
Event summary
- Milliman's Pension Buyout Index (MPBI) remained at 100.1% in November 2025, representing the estimated cost to transfer retiree pension risk.
- The average annuity purchase cost across insurers in the index also held steady at 103.3%.
- Plan sponsors are saving an estimated 3.2% on PRT costs through competitive bidding.
- Third-quarter 2025 PRT sales reached $10.6 billion, indicating increased buyout activity.
- Smaller and mid-sized buyout contracts comprised a larger portion of the total activity in Q3 2025.
The big picture
The stability of the MPBI suggests a degree of equilibrium in the pension risk transfer market, despite increased activity. This pricing environment benefits plan sponsors seeking to offload liabilities, but also indicates that insurers are maintaining disciplined underwriting. The increased prevalence of smaller deals suggests a broadening of PRT adoption beyond the largest, most complex plans.
What we're watching
- Market Volatility
- Continued macroeconomic uncertainty could impact insurer pricing and the attractiveness of PRT, potentially disrupting the stability observed in November.
- Competitive Landscape
- The 3.2% savings from competitive bidding suggests a dynamic market; further consolidation or new entrants could alter this advantage.
- Deal Size Trends
- The rise in smaller and mid-sized buyout contracts may indicate a shift in plan sponsor strategies, and the pace at which this trend continues will reveal broader adoption patterns.
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