Milliman analysis: Competitive pension risk transfer cost increased from 100.1% to 100.3% during December

Competitive bidding process saves about 3.1% of buyout costs as of December 31, 2025

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 December, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process inched up 20 basis points, from 100.1% to 100.3% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.3% of a plan’s ABO.

During the same time period, the average annuity purchase cost across all insurers in our index also increased, from 103.3% to 103.4%. The competitive bidding process is estimated to save plan sponsors about 3.1% of PRT costs as of December 31, 2025.

“Earlier this month, the U.S. Department of Labor filed an amicus brief to clarify the legal context for pension risk transfers,” explained Jake Pringle, Milliman principal and co-author of the MPBI. “In the brief, the DOL said fiduciaries enjoy protection as long as they engage in the pension risk transfer process in a way that demonstrates prudence and loyalty. Coupled with steady retiree buyout costs, this is welcome news for plan sponsors looking to reduce pension obligations through a pension risk transfer as we begin 2026.”

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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