Pension Markets

U.S. Pension Risk Transfer Sales Post Record-High First Quarter

Total single-premium PRT sales more than double to $14.6 billion

WINDSOR, Conn., June 6, 2024 —Total U.S. pension risk transfer (PRT) premium was $14.6 billion in the first quarter 2024, 130% higher than first quarter 2023, according to LIMRA’s U.S. Group Annuity Risk Transfer Sales Survey.

There were 146 contracts sold in the first quarter, 26% higher than prior year. These contracts cover almost 200,000 pension participants. Since January 2020, U.S. PRT deals have covered more than 2.5 million participants.

“Demand for PRT solutions continues as favorable economic conditions spur plan sponsors to de-risk their pension obligations. While there were a few jumbo deals driving the remarkable premium growth, the number of contracts sold was the highest first quarter results seen since LIMRA has been tracking sales, signaling broad plan sponsor interest,” said Keith Golembiewski, assistant vice president, head of LIMRA Annuity Research. “LIMRA expects this momentum to continue throughout 2024.”

Single-Premium Buy-Out & Buy-In Sales

Single-premium buy-out sales were $14.2 billion in the first quarter, up 124% from prior year’s results. There were 144 buy-out contracts in the first quarter, up 24% from the first quarter 2023.

There were two single-premium buy-in contracts reported in the first quarter, representing $435.6 million. There were no buy-in contracts in the first quarter of 2023.

Single premium buy-out assets reached $273.3 billion in the first quarter, up 14% from the prior year. Single premium buy-in assets were $7 billion for the quarter, 19% higher than in first quarter 2023. Combined, single premium assets were $280.3 billion, an increase of 14% year over year.

A group annuity risk transfer product, such as a pension buy-out product, allows an employer to transfer all or a portion of its pension liability to an insurer. In doing so, an employer can remove the liability from its balance sheet and reduce the volatility of the funded status.

LIMRA Fact Tank

This survey represents 100% of the U.S. Pension Risk Transfer market. Breakouts of pension buy-out sales by quarter and pension buy-in sales by quarter since 2018 are available in the LIMRA Fact Tank.

 

 

 

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