Single Premium Pension Buy-Outs Top $1 B in 1st Q

By John Iekel • May 29, 2018 • 0 Comments
Single premium pension buy-out sales exceeded $1 billion in the first quarter of 2018, says a recent report.

In fact, those sales topped $1.3 billion, according to the LIMRA Secure Retirement Institute (SRI). But it’s not really anything new, LIMRA says; it notes that the first quarter was the 12th consecutive quarter in which single premium pension buy-out sales were $1 billion or more, and the third consecutive year in which sales in the first quarter exceeded $1 billion.

Not only that, this is part of a longer-term trend — the number of U.S. employers sponsoring pension plans has been declining for 20 years, LIMRA SRI Research Analyst Eugene Noble noted in a news release. He added that increasing interest in pension risk transfer (PRT) is attributable to stock market volatility, low interest rates, increasing longevity and rising Pension Benefit Guaranty Corporation premiums.

And even the first quarter figures may not tell the whole story, Noble indicated. He remarked in a news release that there have been some of what he called “major PRT deals” that the first quarter statistics do not include, and that LIMRA expects those sales to be reported in the near future.

LIMRA SRI anticipates more of the same through the rest of the year, projecting that the PRT market will exceed $23 billion in 2018.