Milliman analysis: Competitive pension risk transfer cost inches downward to 100.0% during August

Competitive bidding process saves about 3.4% of buyout costs as of August 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 August, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 100.1% to 100.0% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.0% of - that is, the same as – a plan’s ABO.

During the same time period, the average annuity purchase cost across all insurers in our index decreased from 104.1% to 103.4%. The competitive bidding process is estimated to save plan sponsors about 3.4% of PRT costs as of August 31, 2025.

“Competitive annuity purchase rates continue to bring good news to plan sponsors with imminent PRT projects, as the MPBI fell to 100.0% – the lowest level in over 2 years,” said Jake Pringle, Milliman principal and co-author of the MPBI. “With the MPBI continuing to drop for the 5^th month in a row, the 4^th quarter may be busier than usual with opportunities in the pipeline for insurers.”

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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