The first half of 2022 saw combined buyout and buy-in sales totaling $17.6 billion, which surpasses the previous record for first-half sales, which was $9.7 billion in the first half of 2018.
"The pension risk transfer market is experiencing several tailwinds that are driving the record growth we are witnessing," said Mark Paracer, assistant research director, LIMRA annuity research, in a news release Wednesday. "Increased market volatility, rising interest rates and escalating costs to maintain plans are all presenting challenges to plan sponsors. Our research shows there is growing plan sponsor interest in derisking their pension liabilities. LIMRA expects 2022 to be another strong year for pension risk transfer sales."
The largest disclosed transaction in the second quarter was completed June 24 by Lockheed Martin Corp., Bethesda, Md., which purchased group annuity contracts from two Athene Holding subsidiaries to transfer about $4.3 billion in U.S. pension plan liabilities.
LIMRA also said there were no buy-in contracts completed during the second quarter. During the first quarter, there had been four buy-in contracts totaling $2.7 billion. Pension buy-in transactions, in which an insurer reimburses the company for benefit payments the plan will make to its retirees and beneficiaries, are very common in the U.K., but rare in the U.S.
LIMRA surveyed the 19 financial services companies that provide all the group annuity contracts for U.S. corporate pension plans.
