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Pension Funds

U.S. corporate pension buyouts exceed $1 billion for 12th straight quarter

U.S. corporate pension plan buyout sales totaled $1.38 billion during the first quarter, a LIMRA Secure Retirement Institute sales survey found.

It is the 12th consecutive quarter of sales exceeding $1 billion and the third year in a row that first-quarter buyout sales exceeded that amount, although it was slightly less than the $1.42 billion in sales during the first quarter of 2017.

Buyout sales totaled $11.1 billion in the fourth quarter of 2017. The majority of pension buyout sales traditionally take place in the third and fourth quarters.

The survey noted that several large transactions that have been reported will be reflected in future quarters' surveys. The largest was announced earlier this month by FedEx Corp., Memphis, Tenn., which purchased a group annuity contract with MetLife to transfer about $6 billion in U.S. pension plan obligations.

"For the past 20 years, the number of U.S. employers sponsoring defined benefit plans has declined," noted Eugene Noble, LIMRA Secure Retirement Institute research analyst, in a news release. "Low interest rates, stock market volatility, increased longevity and rising Pension Benefit Guaranty Corp. premiums contribute to the growing plan sponsor interest in pension risk transfer."

The LIMRA Secure Retirement Institute surveys the 15 financial services companies that provide all the group annuity contracts for the U.S. for its Group Annuity Risk Transfer Survey every quarter.