Pension Risk Transfer Market Thrives in 2024

The pension risk transfer (PRT) market experienced significant growth in 2024, with a 14% increase in sales compared to 2023, totaling $52 billion across 794 transactions. Key factors contributing to this growth included favorable market conditions, which allowed companies to lock in gains and hedge against interest rate risks. Despite this success, experts like Paula Cole from Nationwide anticipate a potential contraction in 2025 due to pending lawsuits and a shift in market dynamics. Overall, the PRT industry has seen increasing popularity and the number of providers has doubled in the last decade.

As the market expands, plan sponsors are increasingly confident in PRT providers, with many returning for repeat transactions due to positive experiences. Nationwide has noted a surge in repeat business as they focus on service excellence and adapting to market conditions. With 93% of companies aiming to completely divest their plan liabilities, the PRT market seems set for continued interest from participants.

Advisors are encouraged to collaborate with experienced partners who understand the complexities of this market. Nationwide aims to distinguish itself by providing exceptional customer experience, leveraging technology for seamless transactions, and ensuring that plan participants are well supported throughout their annuity life cycle. Overall, the PRT remains a vital tool for securing the future of pension payments for plan participants.