Data and Research May 5, 2022

Pension Risk Transfer Volume At Record Level

First quarter pace is projected to accelerate this year.

Reported by

The pension risk transfer market had a total volume of $5.5 billion in the first quarter of 2022, according to a report by Legal & General. This is the largest first quarter for the PRT market in history. It represents a 45% increase from last year’s first-quarter volume of $3.8 billion and a 22% increase from 2020’s first-quarter volume of $4.5 billion. Two deals made during Q1 of 2020 were over $1 billion in volume.

According to the report, the PRT market is expected to grow even more in the next quarter.

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“The market may be heading toward its strongest first half of the year yet, which we anticipate could exceed $20 billion,” states the report.

Plan termination also increased this quarter, representing 60% of all deals transacted by premium. The other 40% were lift-outs, in which only a portion of the pension plans’ participants get transferred to an insurance company.

Increasing funding levels among corporate plans are also thought to contribute to the growing PRT market, as many plan sponsors are seeing this as a good time to terminate plans.

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