Credit: pla2na/Adobe Stock
U.S. pension risk transfer sales declined sharply in the second quarter of this year, according to the latest survey from LIMRA.
A group annuity risk transfer, such as a pension buy-out product, allows an employer to transfer all or a portion of its pension liability to an insurer. In doing so, the employer can remove the liability from its balance sheet and reduce the volatility of the funded status.
One hundred and thirty-eight contracts were sold in the second quarter, down 30% from the same period last year. Carriers sold 252 contracts in the first half of the year, which was 24% lower than sales for the first six months of 2024. In other sales numbers:
- Premium risk transfer sales totaled $4.1 billion, down 64%;
- Buy-out sales fell 50% to $3.7 billion; and
- Buy-out sales topped $263 million, falling 86% year over year.
“Higher economic volatility in the second quarter, coupled with no jumbo deal activity and elevated litigation concerns, dampened pension risk transfer sales in the second quarter,” said Keith Golembiewski, assistant vice president and head of annuity research for LIMRA “However, our data suggest employers are still looking to mitigate their pension liabilities. More than a third of second-quarter sales (38%) were retiree-only carve-outs.”
Single-premium buy-out sales fell 60% to $3.7 billion in the second quarter. There were 122 buy-out contracts in the second quarter, 33% lower than the second quarter of 2024. Year to date. There were 247 buy-out contracts totaling $10.6 billion, representing a 54% sales decline.
Three smaller single-premium buy-in contracts were reported in the second quarter, representing $263.2 million, which is an 86% decline in premium year over year. In the first six months of 2025, buy-in sales were $404.8 million, down 82%. U.S. carriers reported five buy-in contracts, equal to the contracts sold during the same period in 2024.
Single-premium buy-out assets reached $307 billion in the second quarter, 10% higher than the previous year. Single-premium buy-in assets were $6.3 billion for the quarter, down 27% from the second quarter of 2024. Combined, pension risk transfer assets totaled $343.4 billion, representing a 7% year-over-year increase.
“Although this year’s sales will likely remain below the record sales set in 2024, growing plan sponsor interest as more carriers enter the market — expanding market capacity — will ultimately propel strong PRT sales in future years,” Golembiewski said.
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