As per Legal & General’s Pension Risk Transfer (PRT) Monitor, 2024 has started strong for the US PRT market, with Q1 closing at an estimated $15 billion, the largest opening quarter on record.
According to the firm, Q1 2024 significantly outperformed the previous record of $6.3 billion, which was set in 2023, and nearly tripled the 2022 figure of $5.3 billion.
Legal & General’s PRT Monitor observed that jumbo transactions continue to be the “driving force” behind the market’s strong performance.
There were reportedly two such transactions closed in Q1, totalling $11 billion.
Additionally, the firm explained that the US pension funding ratio remains high, playing a pivotal role in the number of transactions that come to market.
Legal & General concluded, “In April 2024, the US pension funding ratio was 107.6%. As funded statuses stay elevated, we expect continued demand for de-risking from plan sponsors who are in a good position to transact.
“Looking forward, we estimate the first half of 2024 to come in at around $22 billion, which is in line with what we saw in H1 last year. Jumbo transactions will continue to drive total market volume, and we expect at least 3 more to close this year.”
