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It is slightly cheaper for pension plans to retain the liabilities associated with their plan than to purchase annuities for retirees in a buyout of the plan.

According to the Mercer U.S. Pension Buyout Index for May, the cost of purchasing annuities rose from 109 percent in April to 109.5 percent of the accounting liability, while the economic cost of retaining the retirees remained at 108.5 percent of the accounting liability.

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