The PRT market in the U.S. started to kick off in earnest in 2012 with the GM and Verizon deals, for a combined total of $36 billion. From that year on, the market has continued to grow. In 2019, the transfer of pension obligations to domestic life insurers through buy-ins and buyouts amounted to $30 billion, the highest total since 2012. In 2019, two of the largest deals in the U.S. were Baxter International Inc. which transferred $2.4 billion in U.S. pension plan liabilities and Lockheed Martin, which secured a $1.9 billion buyout. Meantime, Bristol-Myers Squibb Co. transferred the remaining $200 million of a $3.8 billion buyout announced in 2018. In the U.K. activity continued apace, with some £40 billion in PRT deals getting completed, including our own £4.6 billion Rolls-Royce buyout, and the continuation of our ICI buyout, which including our most recent transaction, to date adds up to £5.8 billion. We may see a somewhat smaller market this year, but we'd attribute that more to the COVID-19 pandemic than to any winding down of the need for this type of transaction.

Instant Insights /

Where pension risk transfer might surprise you

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