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Single Premium Pension Buy-Outs Robust

Single premium pension buy-out sales totaled $1.4 billion in the first quarter of 2017, exceeding $1 billion for the eighth consecutive quarter, says the LIMRA Secure Retirement Institute.

But the first quarter results were even more striking than they may appear at first blush. According to LIMRA Assistant Vice President Matthew Drinkwater, the first quarter of 2017 also:

  • brought pension buy-outs 31% above those of the first quarter of 2016;

  • saw total assets of buy-out products 11% higher than in the first quarter of 2016;

  • was the second first quarter since 2008 whose sales exceeded $1 billion; and

  • had the highest first quarter sales in at least 15 years.

Drinkwater noted that buy-out sales generally are seasonal, but that LIMRA has found that this is changing. “More recently, the Institute has observed broader, more consistent sales. Buy-out sales have surpassed $1 billion for eight consecutive quarters,” he said.

LIMRA also reports that it has found that 80% of employers with DB plans are interested in pension risk transfers such as buy-outs.