Milliman analysis: Competitive pension risk transfer cost decreases to 100.1% during July

Competitive bidding process saves about 4% of buyout costs as of July 31

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 July, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process inched down from 100.2% to 100.1% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.1% of a plan’s ABO.

During the same time period, the average annuity purchase cost across all insurers in our index increased from 103.9% to 104.1%. The competitive bidding process is estimated to save plan sponsors about 4.0% of PRT costs as of July 31, 2025.

“The spread between the most competitive annuity purchase rates and the average hit a 3-year high of 4.0%, highlighting the impact a competitive bidding process can have on PRT costs for plan sponsors,” said Jake Pringle, Milliman principal and co-author of the MPBI. “Especially since we’ve now seen competitive buyout costs drop for the fourth month in a row.”

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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