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Buyouts a favorite in 2017; overall pension risk transfers down

Pension plans around the globe have offloaded $6.8 billion in liabilities so far in 2017. In 2016, $18.8 billion in liabilities were transferred from plan sponsors, a decline from 2015’s $35.3 billion and 2014’s $60.5 billion.

Buyouts were the leading source of risk transfer, with about $3.9 billion in annuity contracts purchased. The largest buyout transaction so far in 2017 was Hartford Financial Service Group’s $1.6 billion contract purchase from Prudential Financial on June 23. Accenture settled about $1 billion in liabilities on June 23 as well via annuity contracts purchased between AIG and Massachusetts Life.

Lump-sum payouts were about $2 billion in settlements. The largest lump-sum acceptance transaction so far in 2017 was the $685 million payout by UPS.

Pensions & Investments has been tracking data in this area since 2009.