U.S. Pension Risk Transfer. 2023 Reflections and Looking Ahead
By AON
The U.S. pension risk transfer (PRT) market saw another record-breaking year in 2023. After setting record highs for total premium in 2021 and 2022, the market set a new high-water mark for the total number of transactions in 2023 with 773 deals closing during the calendar year. These transactions resulted in $45 billion of premium transferred. Since 2012, $318 billion of pension obligations have transferred from plan sponsors to insurance companies.
On the other side of the equation, insurer interest has never been higher. Insurer pricing for PRT remains competitive across deals of all sizes, especially with new entrants over the last few years. These factors, coupled with the factors above, demonstrate the positive momentum in the PRT market as we look ahead. In this paper, we will recap the highlights of the 2023 PRT market and then shift out focus to the future, exploring the emerging adoption of buy-ins as a precursor to plan terminations and looking at potential changes to the Department of Labor’s 95-1 guidance.
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