Milliman’s latest results of its Milliman Pension Buyout Index (MPBI) show that during July, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process inched down from 100.2% to 100.1% of a plan’s accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree PRT cost is now 100.1% of a plan’s ABO.
During the same period, the average annuity purchase cost across all insurers in the index increased from 103.9% to 104.1%. The competitive bidding process is estimated to save plan sponsors about 4.0% of PRT costs as of July 31, 2025.
“The spread between the most competitive annuity purchase rates and the average hit a 3-year high of 4.0%, highlighting the impact a competitive bidding process can have on PRT costs for plan sponsors,” said Jake Pringle, Milliman Principal and Co-Author of the MPBI.
“Especially since we’ve now seen competitive buyout costs drop for the fourth month in a row.”
The MPBI compares the FTSE Above Median AA Curve to the annuity purchase composite interest rates from nine insurers to estimate the competitive and average costs of a PRT annuity de-risking strategy.