Pension Risk Transfer Costs Dip Slightly in June as Competitive Bidding Savings Hold — Milliman, Inc.

Event summary

Milliman's Pension Buyout Index (MPBI) shows competitive pension risk transfer costs decreased from 99.7% to 99.6% of accounting liabilities in June.
Average annuity purchase cost across all insurers increased by 10 basis points, from 102.5% to 102.6%.
Competitive bidding process saved plan sponsors about 3.0% of buyout costs as of June 30, 2026.
A new insurer entered the group annuity market, bringing the total to 24.

The big picture

The slight decrease in competitive pension risk transfer costs reflects ongoing efforts by plan sponsors to optimize de-risking strategies. The entry of a new insurer into the group annuity market suggests growing interest in this space, potentially driving further cost efficiencies. However, the average annuity purchase cost increase highlights the volatility in this segment.

What we're watching

Cost Optimization: How sustained competitive bidding will affect long-term pension risk transfer costs.
Market Dynamics: Whether the entry of new insurers will increase competition and further reduce buyout costs.
Regulatory Impact: The pace at which regulatory changes might influence pension risk transfer strategies.