U.S. corporate pension plan buyout sales totaled $4.5 billion in the first quarter, a LIMRA Secure Retirement Institute sales survey found.
The amount for the quarter was 6.2% lower than the same period in 2019, but it does represent only the second time that buyout sales for the first quarter of any given year has exceeded $4 billion. Buyout activity has traditionally taken place in the second half of calendar years.
There were 77 group buyout contracts sold during the first quarter, the same as the number of contracts reported during the first quarter of 2019.
The number of buyouts overall for 2020 is expected to decline, according to LIMRA.
"The economic impact of the COVID-19 pandemic should slow down the volume of pension risk transfer deals in the short term as funding levels have fallen sharply since year-end 2019," said Mark Paracer, assistant research director for the institute, in a news release announcing survey results.
"Additionally, the uncertain timing of the recovery may give some employers reason to pause," Mr Paracer said. "However, the costs of the PBGC premiums and administration costs will continue to drive companies toward pension risk transfer deals. Based on what we're hearing from carriers, we may see the volume pick up again later this year."
LIMRA surveyed the 17 financial services companies that provide all the group annuity contracts for U.S. corporate pension plans.
