The latest results of the Milliman Pension Buyout Index (MPBI) suggest that during January, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process in the US inched up 10 basis points, from 100.3% to 100.4% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.4% of a plan’s ABO.
During the same time period, the average annuity purchase cost across all insurers in the index also increased, from 103.4% to 103.5%. The competitive bidding process is estimated to save plan sponsors about 3.1% of pension risk transfer costs as of January 31, 2026.
“The competitive retiree buyout cost stayed below 101% for the 9th month in a row despite a small increase in January,” said Jake Pringle, Milliman Principal and Co-Author of the MPBI.
“We continue to see favorable results for plan sponsors looking to de-risk through pension risk transfers.”
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.