More defined benefit plan sponsors moved to de-risk their pension funds by selling the obligations to insurers in 2024. The pension risk transfer market grew as total U.S. single-premium PRT sales hit $51.8 billion, up 14% from the prior year.
The market’s result in 2024 was less than 1% off the record set in 2022, according to LIMRA’s U.S. Group Annuity Risk Transfer Sales Survey.
In 2024, there were 794 single-premium contacts sold—a new record for the U.S. market. The year’s fourth quarter saw total single-premium PRT sales fall 4% year over year to $12 billion, which LIMRA found aligned with the “choppy nature of PRT sales.”
According to Keith Golembiewski, LIMRA’s assistant vice president and head of annuity research, 14 carriers closed at least one deal worth at least $1 billion in 2024.
“The PRT market continues to expand,” Golembiewski said in a statement. “While recent interest rate declines and equity market volatility may dampen sales later in 2025, greater plan sponsor awareness of these solutions will keep interest high and sales above pre-pandemic levels.”
Some of the largest PRT deals in 2024 included IBM Corp.’s $6 billion transaction, Verizon Communications Inc.’s $5.9 billion transaction and Shell USA Inc.’s $4.9 billion transaction, all conducted with Prudential Financial Inc.
LIMRA also found that single-premium buyout sales, tracked separately from single-premium PRT sales, . There were 254 buyout contracts finalized in the fourth quarter, 9% fewer than in the prior year’s fourth quarter. But over the whole year, buyout premium jumped 16% to $48.1 billion.
A group annuity risk transfer, such as a pension buyout, allows an employer to transfer all or a portion of its pension liability to an insurer. In doing so, the employer removes the liability from its balance sheet and reduces the volatility of its funded status, according to LIMRA.
Corporate pension funding ratios declined in February, a result of both weak equity returns and an increase in the value of pension liabilities.
Tags: LIMRA, Pension Risk Transfer, PRT
