Pension Risk Transfer Buy-Out Sales Stay Strong

By Allison Bell

News November 22, 2019 at 04:30 AM

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Employers bought fewer pension buy-out annuities from U.S. issuers in the third quarter than in the third quarter of 2018, but one big pension risk transfer transaction helped increase total volume, according to new survey data from the LIMRA Secure Retirement Institute.

Seventeen insurers participated in the survey.

Employers can use single-premium group annuities to give insurers responsibility for paying part or all of a defined benefit pension plan's benefits.

Insurers reported making 111 new buy-out contract deals in the third quarter.

That compares with a deal count of 167 in the year-earlier quarter.

The dollar value of the deals increased to $7.7 billion, from $6.3 billion.

For the first three quarters of the year, the number of contracts sold has increased to 301, from 281 in the comparable period in 2018.

Mark Paracer, a member of the survey team, said in a statement about the survey results that one substantial contract sale was reported in the third quarter, and that the number of midsize contracts sold was also high.

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