The Current Environment for Pension Risk Transfer – A Roundtable Conversation

November 2025

Author

Steven Siegel, ASA, MAAA

Executive Summary

Overview

Pension risk transfer (PRT) is a process where defined benefit plan sponsors transfer risks—such as longevity, investment, and interest rate risk—to insurers or reinsurers. The PRT market has seen robust growth, with $51.8 billion in premiums and over 750 transactions in 2024. The Society of Actuaries Research Institute convened a roundtable with stakeholders from insurers, reinsurers, consulting firms, and regulatory bodies to discuss the current landscape and future outlook.

Common Situations for Pension Risk Transfer

Corporations typically consider PRT when the pension plan size exceeds their risk tolerance, PBGC premiums rise, or when plans are overfunded and sponsors seek surplus access. Frozen plans, especially those well-funded, are frequent candidates for PRT, as sponsors aim to reduce balance sheet risk and improve efficiency. Reinsurers support insurers in these transactions, enhancing market capacity and growth.

Pension Risk Transfer Analysis, Documentation, and Litigation

Selecting a transfer partner involves competitive bidding and actuarial analysis, often guided by Department of Labor rules and independent fiduciaries for large deals. Documentation is critical to minimize litigation risk, with independent fiduciaries providing process transparency. Litigation concerns influence timing and structure, though data on trends is still developing.

Key Risk Assumptions

Insurers and reinsurers evaluate mortality, investment rates, and other assumptions using third-party data and models. Base mortality is generally consistent across large cases, while future mortality improvement assumptions vary. Investment strategy and initial returns are pivotal in pricing, with COVID-era impacts still affecting assumptions.

Regulatory Considerations

PRT transactions often use separate accounts, with regulators assessing plans of operation and transaction size limits. Oversight varies by state and insurer experience, with independent fiduciaries playing a key role in ensuring safety and compliance. Solvency, investment returns, and liquidity risks are central to regulatory review.

Market Outlook

Panelists expect continued growth in PRT volume and market capacity, driven by corporate focus on core business and risk transfer to insurers. New entrants and increased reinsurer involvement are expanding the market, with no major regulatory or legislative changes anticipated. The consensus is for sustained, significant growth in pension risk transfer.

Material

The Current Environment for Pension Risk Transfer – A Roundtable Conversation

Acknowledgements

The Society of Actuaries Research Institute and author of this report are grateful for the participation of the panelists in this conversation and for their willingness to share their views. Thanks also to Dale Hall for moderating the conversation and providing informative commentary throughout the conversation.

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