Milliman analysis: Competitive pension risk transfer cost increased from 99.6% to 99.7% during July
Competitive bidding process saves about 3.4% of buyout costs as of July 31
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Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). During July, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process inched up by 10 basis points, from 99.6% 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 surged by 50 basis points, from 102.6% to 103.1%. The competitive bidding process is estimated to save plan sponsors about 3.4% of PRT costs as of July 31, 2026.
“The Milliman Pension Buyout Index continues to indicate favorable results for plan sponsors considering pension risk transfer, with competitive costs landing under 100% for the third month in a row in July,” said Jake Pringle, co-author of the MPBI. “Although there are many factors to consider before embarking on a PRT project, this year has been marked by attractive conditions for plan sponsors adequately ready to act.”
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.
About Milliman
Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at milliman.com.
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