In February, the cost of purchasing annuities for retirees in U.S. pension plans jumped to 110 percent of the accounting liability for the plan, according to the Mercer US Pension Buyout Index.
In 2013, "we saw the cost rise slightly from 108 percent at year-end Dec. 31, 2012, to 110 percent as of Jan. 31, 2013, and remain at 110 percent as of February 28, 2013," according to Mercer. "While discount rates used to value pension benefits rose slightly at month end January 2013, producing lower accounting liabilities, on average insurer pricing remained broadly flat during this period, resulting in a higher relative premium."
In February, both accounting discount rates and average insurer pricing dropped slightly, leaving the relative premium broadly unchanged.
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