Pension risk transfer premiums fell slightly for the second month in a row in August, a study by Milliman showed.

According to a report of the Milliman Pension Buyout index, the estimated buyout cost as a percentage of accounting liabilities (accumulated benefit obligation) was 102.2% as of Aug. 31, down from 102.3% as of July 31. That month’s premium was down from 102.4% as of June 30.

Meanwhile, the average annuity purchase rates among the most competitive rates remained steady in August. The index for competitive pricing stayed at 100.1% as of Aug. 31.

“Recent research on group annuity risk transfer shows that single premium buy-outs and buy-ins through midyear 2021 have seen a 30% increase over midyear 2020,” Mary Leong, a consulting actuary with Milliman and co-author of the study, said in a news release. “However, this jump comes after a sluggish start to 2021, and could reflect, in part, plan sponsors who were not active (in the first quarter) making up for lost time. We expect the upward trend to continue for the remainder of the year.”

Average accounting discount rates increased by 7 basis points during August, while annuity purchase rates increased by 7 basis points on average and 6 basis points for the most competitive rates, according to the report.

The Milliman Pension Buyout index uses the FTSE Above Median AA Curve and insurers’ composite interest rates to estimate the average cost of pension risk transfer transactions.

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