Milliman analysis: Competitive pension risk transfer cost decreased from 100.1% to 99.7% during May

Competitive bidding process saves about 2.8% of buyout costs as of May 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 May, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process dropped by 40 basis points, from 100.1% to 99.7% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 99.7% of a plan’s ABO.

During the same time period, the average annuity purchase cost across all insurers in our index decreased 90 basis points, from 103.4% to 102.5%. The competitive bidding process is estimated to save plan sponsors about 2.8% of PRT costs as of May 31, 2026.

“The Fed chose to keep interest rates steady this week as inflation reached a three-year high,” said Jake Pringle, co-author of the MPBI. “At the same time, the competitive MPBI fell below 100%, while both the competitive and average indices reached three-year lows – all of which is great news for plan sponsors. We expect a busy second half of the year for PRT projects as insurer pipelines are filling up.”

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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