The estimated cost for transferring retiree pension risk to an insurer saw a slight but significant decrease in October, to 100.1%, according to the latest figures from the Milliman Pension Buyout Index (MPBI).
The estimated cost to transfer pension risk through a competitive bidding process declined from 100.5% to 100.1% of a plan’s accounting liabilities, also known as the accumulated benefit obligation (ABO).
“RTX announced a $2.5 billion transaction this month, coming in as the largest PRT deal of the year so far,” said Jake Pringle, Milliman principal and co-author of the MPBI. “With the competitive MPBI back down to just over 100%, this is a positive sign for plan sponsors with pension risk transfer on their agenda.”
During the same time period, the average annuity purchase cost across all insurers the Milliman index decreased from 103.6% to 103.3%.
The competitive bidding process is estimated to save plan sponsors about 3.2% of PRT costs as of October 31, 2025.
The MPBI calculates its figures by comparing the FTSE Above Median AA Curve to the annuity purchase composite interest rates from nine insurers.
The index is used to estimate the competitive and average costs of a PRT annuity de-risking strategy. Individual plan annuity buyouts can vary based on plan size, complexity, and competitive landscape, Milliman noted.
