U.S. pension risk transfer premiums among the most competitive bidding processes remained below 100% in April for the fourth straight month, a study by actuarial and consulting firm Milliman showed.
The estimated average premium among the most competitive rates was 98.3% as of April 30, down from 99.3% as of March 31, according to a report about the Milliman Pension Buyout index.
Also during April, the average annuity purchase cost across all insurers fell to 101.9% from 102.6% a month earlier.
"The downward movement we're seeing in Q2 suggests that the pension risk transfer market is likely to stay hot for the remainder of 2023," said Jake Pringle, a principal and consulting actuary with Milliman and co-author of the study, said in a news release Thursday.
Average accounting discount rates decreased by 8 basis points in April, and annuity purchase rates increased by 6 basis points for the most competitive rates, according to Milliman.
The Milliman Pension Buyout index uses the FTSE Above Median AA Curve and insurers' composite interest rates to estimate the average cost of pension risk transfer transactions.
