Pension Risk Transfer Costs Edge Higher, but Remain Below 100% — Milliman, Inc.

Event summary

Milliman's Pension Buyout Index (MPBI) shows competitive pension risk transfer cost rose from 99.6% to 99.7% of accounting liabilities in July 2026.
Average annuity purchase cost across insurers increased by 50 basis points to 103.1%.
Competitive bidding process estimated to save plan sponsors 3.4% of PRT costs as of July 31, 2026.
This marks the third consecutive month with costs below 100% of accounting liabilities.

The big picture

The slight uptick in pension risk transfer costs comes amid a broader trend of plan sponsors seeking to de-risk their pension liabilities. While costs remain favorable below 100%, the increase highlights the sensitivity of these transactions to market conditions. The competitive bidding process continues to offer savings, but the sustainability of these savings will depend on insurer behavior and economic stability.

What we're watching

Cost Stability: Whether the slight increase in pension risk transfer costs signals a new trend or remains an outlier.
Competitive Dynamics: How insurers will adjust their pricing strategies in response to rising costs.
Market Conditions: The pace at which economic factors will influence future pension risk transfer decisions.