Pension Risk Transfer Costs Inch Up in December

Milliman Pension Buyout Index shows competitive bidding process saved plan sponsors about 3.1% of costs

Jan. 28, 2026 at 12:55am

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Milliman, Inc., a global consulting and actuarial firm, has announced the latest results of its Milliman Pension Buyout Index (MPBI). During December, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process increased 20 basis points, from 100.1% to 100.3% of a plan's accounting liabilities. The average annuity purchase cost across all insurers also increased, from 103.3% to 103.4%. However, the competitive bidding process is estimated to have saved plan sponsors about 3.1% of pension risk transfer (PRT) costs as of December 31, 2025.

Why it matters

The increase in pension risk transfer costs is noteworthy as more companies look to offload their pension obligations to insurers. The competitive bidding process remains an important tool for plan sponsors to reduce these costs, especially as the Department of Labor has provided guidance on the legal context for pension risk transfers.

The details

The Milliman Pension Buyout Index (MPBI) is a monthly metric that estimates the cost for U.S. corporate pension plans to transfer retiree liabilities to insurers. In December, the estimated competitive PRT cost increased from 100.1% to 100.3% of a plan's accumulated benefit obligation (ABO), while the average annuity purchase cost across all insurers increased from 103.3% to 103.4%. However, the competitive bidding process is estimated to have saved plan sponsors about 3.1% of PRT costs as of the end of 2025.

  • The MPBI results are for December 2025.
  • Earlier in January 2026, the U.S. Department of Labor filed an amicus brief to clarify the legal context for pension risk transfers.

The players

Milliman, Inc.

A premier global consulting and actuarial firm that publishes the monthly Milliman Pension Buyout Index (MPBI).

Jake Pringle

Milliman principal and co-author of the MPBI.

U.S. Department of Labor

The federal agency that filed an amicus brief earlier in January 2026 to clarify the legal context for pension risk transfers.

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What they’re saying

“Earlier this month, the U.S. Department of Labor filed an amicus brief to clarify the legal context for pension risk transfers. In the brief, the DOL said fiduciaries enjoy protection as long as they engage in the pension risk transfer process in a way that demonstrates prudence and loyalty.”

— Jake Pringle, Milliman principal and co-author of the MPBI (Business Wire)

What’s next

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The takeaway

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