The latest update to the Milliman Pension Buyout Index (MPBI) shows that during September, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process in the US dropped 20 basis points, from 99.9% 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 Milliman’s index decreased by 30 basis points, from 102.9% to 102.6%. The competitive bidding process is estimated to save plan sponsors about 2.9% of PRT costs as of September 30, 2026.
“While we have yet to see a jumbo transaction in 2026, second quarter PRT results from LIMRA show an uptick in contracts sold, as companies looking for smaller and mid-sized deals took advantage of favorable conditions,” said Jake Pringle, co-author of the MPBI.
“A rise in interest rates and a small drop in the competitive MPBI this month is nice news for plan sponsors with PRT on their agenda.”
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.
