Competitive bidding process saves about 3.6% of buyout costs as of May 31
SEATTLE–(BUSINESS WIRE)–#PRT—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 from 101.1% to 100.8% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.8% of a plan’s ABO.
During the same time period, the average annuity purchase cost across all insurers in our index increased from 104.1% to 104.4%. The competitive bidding process is estimated to save plan sponsors about 3.6% of PRT costs as of May 31, 2025.
“First quarter PRT results were published by LIMRA earlier this month, and the $7.1 billion in new premium sales was significantly lower than last year’s Q1 results of $14.6 billion,” said Jake Pringle, Milliman principal and co-author of the MPBI. “With the MPBI under 101% and increased insurer capacity so far in 2025, this may be a good time for plan sponsors considering a buyout to take advantage of competitive PRT pricing.”
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 pensionbuyout@milliman.com.
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Contacts
Jake Pringle
Milliman, Inc.
Tel: +1 713 202 0819
jake.pringle@milliman.com
