Consulting and actuarial firm Milliman has announced the latest results of its Milliman Pension Buyout Index (MPBI). During August, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 100.1% to 100.0% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO).
That means the estimated retiree PRT cost is now 100.0% of – that is, the same as – a plan’s ABO.
During the same time period, the average annuity purchase cost across all insurers in the index decreased from 104.1% to 103.4%. The competitive bidding process is estimated to save plan sponsors about 3.4% of PRT costs as of August 31, 2025.
“Competitive annuity purchase rates continue to bring good news to plan sponsors with imminent PRT projects, as the MPBI fell to 100.0% – the lowest level in over two years,” said Jake Pringle, Milliman principal and co-author of the MPBI.
“With the MPBI continuing to drop for the fifth consecutive month, the 4th quarter may be busier than usual with opportunities in the pipeline for insurers.”
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.