The year 2024 was record-breaking for pension risk transfer (PRT) market activity, with 794 single-premium transactions and near-record premium sales of $51.8 billion. Given this volume, it comes as no surprise that insurers have set high sales goals for group annuity contracts and new insurers are entering the market to claim a share of this business. Plan sponsors are welcoming this interest, as many pension plans have been stagnant for decades without a viable cost-conscious solution. With the rise in interest rates and several years of solid market returns, plan sponsors have been taking advantage of de-risking and plan termination through group annuity contracts.

But given this sustained surge, is now still a good time for a PRT engagement? Are plan sponsors scared off by the uncertainty in the market, pending lawsuits, or the number of resources needed for a PRT project? Just the opposite, at least for the first part of 2025.

Milliman sends out our PRT opportunities to all insurers in the market; however, plan sponsors are told to expect a much smaller number than the 22 insurers who will receive the request for proposal to respond with a bid, as insurers have different focus areas and capabilities.

Milliman’s PRT projects in 2022 saw an average of 3.9 insurers bidding, and that number has jumped to 5.7 so far in 2025. What felt like a slow Q4 for 2024 has been offset by large volume and significant insurer interest in cases in Q1 for 2025. Five of our cases since December have had nine or more insurers bidding on the group annuity contract.

Why is this important? Plan sponsors have a fiduciary duty under the Department of Labor’s Interpretive Bulletin 95-1 (DOL 95-1) to act in the interest of plan participants when selecting a final bid in a PRT transaction. This involves reviewing the financial strength and stability of different insurers, but with many insurers showing stellar results and ratings, differentiation between competitive bids often comes down to finer details of insurer’s bids and capabilities.

The Milliman Pension Buyout Index (MPBI) tracks the disparity between the accounting liability and the PRT liability. The competitive measurement of the MPBI tracks the top three insurer rates each month, and typically results in savings of over 2.5% over the last two years. With more insurers bidding, the likelihood of having one of the top rates included increases.

Plan sponsors with projects in the PRT pipeline seem poised to take advantage of hot market conditions and activity. With solid funded levels, favorable interest rates, and elevated insurer capacity, plan sponsors on the fence should consider if now is the right time to de-risk. Reach out to a Milliman consultant to assist with your PRT needs and help discuss the impact that a PRT may have on your plan financials.