Milliman Pension Buyout Index: Stabilizing Pension Risk Transfer Costs

On December 18, 2025, Milliman, Inc., a leader in actuarial science and consultancy, unveiled its Milliman Pension Buyout Index (MPBI) for November. The findings reveal that transferring retiree pension liabilities to an insurer through competitive bidding is equivalent to 100.1% of the plan's accumulated benefit obligation (ABO). This figure remains consistent, indicating that pension risk transfer (PRT) expenses are nearly aligned with the financial obligations of plan sponsors, thereby highlighting efficient risk management strategies.

Additionally, the index shows the average annuity purchase cost remains stable at 103.3% of the plan’s ABO. This data suggests that competitive bidding allows plan sponsors to potentially save approximately 3.2% on PRT costs by the end of November 2025. The MPBI effectively evaluates these financial dynamics by comparing the FTSE Above Median AA Bond Curve with composite interest rates from nine insurers, providing a comprehensive view of the competitive landscape for annuity purchases crucial for strategic de-risking.

Milliman, established in 1947, offers strategic advisory services in insurance and risk management, helping both public and private sectors tackle market and financial uncertainties worldwide. For more in-depth insights into the Milliman Pension Buyout Index, industry stakeholders are encouraged to engage with Milliman directly, ensuring compliance with regulatory requirements and optimizing pension strategies.