Nearly $6 Billion in Single Premium Pension Buy-Out Sales, LIMRA Says

By ASPPA Net Staff • November 30, 2016 • 0 Comments
Single premium pension buy-out sales hit almost $6 billion in the third quarter of 2016, according to a recent report by the LIMRA Secure Retirement Institute.

This is the highest level of single premium pension buy-out sales for any third quarter since 1990 in LIMRA’s research. It also is the most robust sales figure since the fourth quarter of 2014, when they reached almost $7 billion.

The third quarter results are a continuation of the trend already set in this year, LIMRA says. It found that activity in the first nine months of 2016 was slightly above that of the same period one year before. In addition, the institute says that conversions of defined benefit plans to group annuity contracts have already hit “an all-time high” this year. It says that so far in 2016, 225 plan sponsors have made such conversions, 17% more than in 2015.

LIMRA attributes the third quarter sales to continued volatile equity markets and low interest rates, as well as the Pension Benefit Guaranty Corporation’s increase in premiums and shift to new mortality tables.