During July, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process in the US inched up by 10 basis points, from 99.6% to 99.7% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO), according to Milliman. That means the estimated retiree pension risk transfer (PRT) cost is now 99.7% of a plan’s ABO.
During the same period, the average annuity purchase cost across all insurers in the Milliman Pension Buyout 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 favourable 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.”
