U.S. pension risk transfer sales totaled $16.2 billion in the second quarter, more than doubling the volume from the previous quarter, a LIMRA survey found.
The total volume in the second quarter also exceeded the volume during the same period last year by 31%, according to the survey.
The increase in buyout volume from $12.3 billion in the second quarter of 2022 was primarily due to a single transaction. On May 1, Dallas-based AT&T Inc. announced the third-largest U.S. buyout transaction in history, having completed an agreement to purchase group annuity contracts from two Athene Holding subsidiaries to transfer $8.1 billion in U.S. pension plan liabilities.
PRT volume totaled $6.3 billion in the first quarter and based on the total volume in the first half of 2023, it could be another record-breaking year, said Mark Paracer, assistant research director, LIMRA annuity research, in a news release Tuesday.
LIMRA had measured an all-time record of $48.3 billion in 2022.
"The robust growth in contracts in the first half of the year is also a newer trend," said Mr. Paracer. "In past years, much of the business occurred in the fourth quarter. More recently we are seeing the activity spread out throughout the year, as market expansion has led to more competitive pricing and increased plan sponsor interest."
Of the total sales in the second quarter, single-premium buyouts totaled $14.6 billion during the second quarter. LIMRA also said there were four buy-in contracts completed during the second quarter totaling $1.6 billion. There were no buy-in contracts completed during the first quarter. 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 21 financial services companies that provide all the group annuity contracts for U.S. corporate pension plans.