During June, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process in the US inched down by 10 basis points, from 99.7% to 99.6% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO) according to the latest Milliman Pension Buyout Index (MPBI). That means the estimated retiree PRT cost is now 99.6% of a plan’s ABO.
During the same period, the average annuity purchase cost across all insurers in the MPBI climbed by 10 basis points, from 102.5% to 102.6%. The competitive bidding process is estimated to save plan sponsors about 3.0% of PRT costs as of June 30, 2026.
“Competitive buyout costs remained below 100% for the second month in a row, extending the three-year low we saw last month,” said Jake Pringle, Co-Author of the MPBI.
“In other exciting news for plan sponsors, a new insurer announced they are entering the PRT space, the 24th in the group annuity market.”
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.
