Pension Plan Annuity Purchase Update – Q4 2022

Market Activity

Source: LIMRA Secure Retirement Institute

Following the record-breaking Q3, pension buyout sales totaled $7.1B in Q4 2022. Despite this representing the lowest fourth quarter amount since 2016, total 2022 sales of $48.3B shattered the previous annual record of $36B set in 2012 (which included the initial landmark buyouts from GM and Verizon) and were a 42% increase from the 2021 total of $34.2B. The total number of buyout contracts of 562 in 2022 also broke the old record of 500 set in 2019.

What We’re Seeing

Following the record-breaking year, pension buyout activity remains very active to start 2023, particularly on the plan termination side. We expect activity to remain strong throughout the year, as high interest rates have generally improved plan funded status and made group annuities more attractive, especially as pricing remains very competitive. For retiree only cases, pricing continues to average 99% of the economic liability[1], while plan termination cases which include in-pay and deferred annuities average approximately 101%[2].

What We’re Hearing

Many plan terminations are expected to wrap up and complete their annuity buyout this year and retiree carveouts will continue to be attractive for PBGC premium savings. As a result, 2023 pension risk transfer activity is expected to be strong throughout the year. In addition, a couple of new insurers have begun bidding on cases. The additional competition will continue to drive attractive pricing for plan sponsors looking to derisk their pension plans.

[1] Measured using FTSE curve and best estimate of underlying mortality.

[2] Based on plan demographics and the mix of deferred and in-pay annuities.



Previous Post
US Pension Briefing – January 2023
Next Post
US Pension Briefing – February 2023

INVESTMENT ADVISOR:  Investment advisory services are provided by Agilis Partners LLC, an investment advisor registered with the US Securities and Exchange Commission.

The information contained in this document is strictly confidential. The information contained herein may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Agilis Partners LLC.


The value of investments and any income generated may go down as well as up and is not guaranteed. An investor may not get back the amount originally invested. Past performance is not a guide to future performance. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this document by Agilis Partners LLC or any of its partners or employees and no liability is accepted by such persons for the accuracy or completeness of any such information.