Milliman analysis: Competitive pension risk transfer costs continue to fall, slip to 100.2% during June

Competitive bidding process saves about 3.7% of buyout costs as of June 30

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). During June, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process dropped from 100.8% to 100.2% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree pension risk transfer (PRT) cost is now 100.2% of a plan’s ABO.

During the same time period, the average annuity purchase cost across all insurers in our index fell from 104.4% to 103.9%. The competitive bidding process is estimated to save plan sponsors about 3.7% of PRT costs as of June 30, 2025.

“The competitive annuity index showed additional improvement in June, getting even closer to break-even at 100.2%, as accounting rates fell even more than insurer annuity purchase rates,” said Jake Pringle, Milliman principal and co-author of the MPBI. “This has been encouraging for plan sponsors, as deals seemed to heat up in the second quarter and many have PRT projects set to complete by the end of the year.”

The MPBI compares the FTSE Above Median AA Curve to the annuity purchase composite interest rates from nine insurers to estimate the competitive and average costs of a PRT annuity de-risking strategy. Individual plan annuity buyouts can vary based on plan size, complexity, and competitive landscape.

View the complete Milliman Pension Buyout Index. To receive regular updates with Milliman’s pension buyout analysis, contact us at [e-mail].

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