PRT Costs Rise in March, while Volumes Fall

Pension risk transfer transactions became slightly more expensive to complete in March, largely due to shifts in tariff policy and economic volatility. According to Milliman, the cost to offload corporate pension plan liabilities to an insurer through a PRT transaction rose to 102.5% of a plan’s liabilities in March, up from 101.7% in February. Milliman also estimated the average annuity purchase cost rose to 104.3% at the end of March, up from 101.7% in February.

“Although interest rates ended the month close to where they started, there was a lot of movement in March largely due to tariff policy shifts and economic volatility,” said Jake Pringle, a principal in Milliman, in a statement. “Ultimately, accounting rates rose slightly while annuity purchase rates declined a touch, causing the monthly competitive [Milliman Pension Buyout Index] to rise to 102.5%.”

Pension risk transfer transactions have becoming increasingly popular among corporate pension plan sponsors as a way to offload liabilities. With many corporate pensions experiencing a surplus of pension assets—average funded levels rose to 109.4% at the end of the year’s first quarter, according to Legal & General Retirement America’s quarterly PRT monitor.

LGRA estimated there was $7 billion in PRT volume for the first quarter of 2025, although that is significantly down from the $14.6 billion recorded in the first quarter of 2024. The firm attributed the drop to a a lack of multi-billion dollar, or “jumbo,” deals.

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LGRA noted that transactions of greater than $1 billion have driven PRT volume in the past. In the first quarter of 2024, two PRT transactions combined to account for $10 billion. In the first quarter of 2025, only one transaction exceeding $1 billion was recorded.

“While transaction activity remains high, more jumbo transactions will be needed in the second half of the year to match record levels seen in the last few years,” the LGRA report noted.