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US Pension Risk Transfer market expected to close $27 billion in Q3: LGRA

18th November 2022 - Author: Kane Wells

Legal & General Retirement America (LGRA) has released its third quarter Pension Risk Transfer Monitor, reporting that it is expected to be the largest Q3 on record and the second largest in market history with $27 billion in transactions closing.

Legal_&_GeneralLGRA notes that this year’s Q3 is only second to 2012’s Q4, which closed at $36 billion.

It adds that with Q1 and Q2 also seeing record-breaking numbers, 2022 will be the largest year ever for the U.S. Pension Risk Transfer (PRT) Market at an estimated $55 billion in total market volume.

The increased volume has been attributed to jumbo transactions, with the largest being IBM’s $16 billion lift-out in Q3. The market is expected to close out the year with at least nine transactions close to or over $1 billion, says LGRA.

As noted in LGRA’s previous PRT Monitors, the trends of large transactions and increased plan terminations have continued through 2022 and are expected to carry through to next year.

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Sheena McEwen, VP, Head of Distribution at Legal & General Retirement America, said, “It’s clear the U.S. PRT market isn’t slowing down anytime soon. We’ve seen a steady increase in transactions year-over-year, with this year expected to close nearly $17 billion higher than last.

“The record growth further emphasizes that PRT is a key de-risking strategy for plan sponsors even amidst market uncertainty.”

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