U.S. Pension Risk Transfer Market Shows Volatility with Buy-In Sales Spike

The U.S. pension risk transfer (PRT) market experienced notable volatility in the third quarter of 2025, reflecting shifting dynamics among pension plan sponsors and insurers. LIMRA's survey highlighted a substantial 328% surge in single-premium buy-in sales, reaching a quarterly record of $4.3 billion. Buy-in products involve plan sponsors purchasing annuity contracts held as plan assets, while the pension liabilities remain on the sponsor's balance sheet. Despite strong buy-in sales, overall third-quarter PRT sales declined 32% year-over-year to $10.6 billion, although they rebounded 137% compared to the prior quarter. Year-to-date total PRT sales stood at $21.6 billion, marking a 48% decline from 2024. Industry experts note increased activity among small- and mid-sized plan sponsors, with over 80% of contracts under $50 million, signifying expanding market participation beyond jumbo deals. Buy-out sales, which involve transferring pension liabilities entirely to insurers and removing them from sponsors' balance sheets, fell significantly by 60% in the third quarter to $5.2 billion, though this represented a 39% increase over the second quarter. In 2025, buy-out contract volumes and sales have decreased notably compared to 2024. Total assets under single-premium buy-out contracts expanded 18% year-over-year, totaling $308.6 billion, while buy-in assets increased 16% to $10.4 billion in the quarter. Market uncertainties, including ongoing volatility, recession concerns, trade tensions, and legal challenges facing PRT providers, have contributed to plan sponsors' cautious approach to de-risking strategies. These factors are likely to continue influencing the PRT market in 2026, potentially impacting pension funding levels and limiting de-risking options. The LIMRA survey encompasses the full scope of the U.S. PRT market, providing comprehensive insights into quarterly trends and contract activity. As more carriers enter the market, increased capacity could foster greater engagement with smaller pension plans, potentially revitalizing sales in future years. Pension risk transfer products, such as buy-in and buy-out annuities, remain critical tools for managing pension liabilities, offering employers ways to mitigate balance sheet volatility and align pension funding with corporate risk management objectives. Industry stakeholders continue to monitor legal, economic, and regulatory developments shaping the evolving PRT landscape.