Pension Risk Transfer Market Heats Up
While the pandemic may have slowed pension risk transfers (PRTs), the momentum has returned and 2021 thus far is outpacing the record-setting 32 transactions in 2019.
In Conning’s latest Pension Insights report, we explain the current dynamics of the PRT market. Life insurers like to purchase the liabilities of U.S. corporate defined benefit pension plans because of the significant amount of assets they can assume. Life insurers also like that pension assets are less complex than indexed or variable annuities in that they do not require expensive hedging programs.
Maintaining the PRT market momentum will likely depend on two things: plan sponsors’ continued interest in de-risking, which remains strong, and the economics of the pension plans themselves.