Pension Risk Transfer Buy-Ins Overtake Buyouts in the $49B 2025 PRT Market

From reviewing LIMRA PRT data across five consecutive annual cycles, the 2025 dip in total volume conceals the most important signal: buy-in transactions now represent a structurally larger share than at any point since PRT tracking began. The 372 percent year-over-year buy-in surge was not a single mega-deal anomaly. It arrived as 17 separate transactions averaging roughly $1 billion each, with Q4 alone producing $12.7 billion in buy-in volume across seven contracts. That quarterly figure nearly matched the entire prior year's buy-in total. When patterns like that emerge, the question for actuaries stops being whether buy-ins will continue gaining share and starts being what the compositional shift means for pricing, capacity allocation, and the plan sponsor decision framework.

$17.5B

2025 US buy-in volume, up 372% from 2024 (LIMRA)

108.1%

Milliman 100 funded ratio at year-end 2025, $98B aggregate surplus

$111

2026 PBGC flat-rate premium per participant, up from $31 in 2007

The 2025 PRT Market in Full: What LIMRA's Numbers Actually Show

LIMRA's U.S. Group Annuity Risk Transfer Survey reported $48.5 billion in combined single-premium PRT sales for full-year 2025, a 6 percent decline from 2024's $51.8 billion. Nationwide's PRT division rounded the figure to approximately $49 billion across 700 transactions, a 12 percent decrease in deal count. The aggregate decline, the first since 2020, drew immediate headlines about a cooling market. Those headlines missed the story.

Breaking the total into its components reveals a market in the middle of a structural realignment:

Metric	2025	2024	Change
Total PRT sales	$48.5B	$51.8B	-6%
Buyout sales	$31.3B	$48.1B	-35%
Buyout contracts	683	785	-13%
Buy-in sales	$17.5B	$3.7B	+372%
Buy-in contracts	17	10	+70%
Participants covered	740,000+	N/A	N/A

Buy-ins represented over one-third of total PRT premium volume for the first time. The Q4 2025 quarter was particularly revealing: total sales of $28 billion (up 132 percent year over year), with buy-in accounting for $12.7 billion of that total across just seven contracts. Keith Golembiewski, LIMRA's assistant vice president, observed that "buy-ins offered flexibility and lower commitment, allowing sponsors to transfer asset and longevity risk while maintaining administrative control."

The buy-in asset base tells a parallel story. Year-end 2025 buy-in assets under management reached $16.1 billion, a 120 percent increase from 2024. Buyout assets grew 10 percent to $326 billion. The combined total of $342.1 billion across both structures marked a 13 percent increase, confirming that the market's aggregate risk transfer capacity continues expanding even as the volume composition shifts.

Buy-In vs. Buyout: The Mechanics That Drive Sponsor Preference

The distinction between a buy-in and a buyout is not merely a matter of degree. The two structures produce fundamentally different outcomes for plan sponsors, participants, and actuaries.

In a buyout, the plan sponsor purchases a group annuity contract from an insurer that permanently assumes responsibility for paying benefits directly to participants. The pension liabilities are removed entirely from the sponsor's balance sheet. Settlement accounting under ASC 715 is triggered. PBGC premium obligations cease for the transferred population. The transaction is irreversible: once a buyout closes, the insurer is the sole obligor, and participants have no further claim against the plan.

In a buy-in, the plan purchases a group annuity contract that becomes an asset of the plan rather than a replacement for the plan. The contract matches the plan's benefit obligations, and the insurer pays cash flows that mirror the plan's liabilities. But the plan remains the policyholder. Participants continue receiving benefits from the plan, not directly from the insurer. The pension obligation stays on the sponsor's balance sheet. No settlement accounting is triggered. PBGC premiums, actuarial valuations, custodian fees, and regulatory filings continue.

The buy-in transfers investment risk and longevity risk to the insurer without transferring administrative responsibility or triggering the accounting consequences of a full settlement. This is the feature, not the bug. For sponsors navigating the current environment, the buy-in structure offers three specific advantages that have made it the preferred first move in a pension endgame strategy.

Balance Sheet Flexibility

Because buy-ins do not trigger settlement accounting, they avoid the income statement volatility that accompanies a full buyout. Under ASC 715, a settlement requires the sponsor to recognize a pro rata share of unrecognized actuarial gains and losses through the income statement in the period of settlement. For a plan with significant accumulated other comprehensive income (AOCI) from prior actuarial losses, a large buyout can produce a material charge. A buy-in locks in the economic risk transfer without forcing that recognition.

Pricing Optionality

Buy-ins allow sponsors to lock in current annuity pricing while preserving the option to convert to a buyout later. If annuity purchase costs decline further, as they did through Q1 2026 when the Milliman Pension Buyout Index dropped to 101.1 percent of accounting liability, the conversion economics improve. The buy-in functions as an insurance contract with an embedded call option on future buyout pricing.

Phased Execution

A plan with 20,000 participants and $4 billion in liabilities may not find a single insurer willing to accept the full block at competitive pricing. A buy-in on the retiree population, typically the most favorably priced segment, reduces the remaining buyout scope to active and deferred participants. Multiple buy-ins can be layered over time, each capturing favorable pricing windows, before a final buyout closes the plan. This phased approach, which Corebridge Financial and other carriers actively structure as "buy-in to buyout" pathways, reduces concentration risk for both the sponsor and the carrier.

The PBGC Premium Pressure Cooker

The PBGC premium structure for single-employer defined benefit plans has become one of the strongest economic forces pushing sponsors toward PRT transactions. The 2026 premium schedule crystallizes why.

Component	2007	2020	2025	2026
Flat-rate per participant	$31	$83	$106	$111
Variable-rate (per $1,000 UVB)	$9	$46	$52	$52
Variable-rate cap per participant	N/A	$561	$717	$751

The flat-rate premium has increased 258 percent since 2007. The variable-rate premium, which applies per $1,000 of unfunded vested benefits, was frozen at $52 starting in 2024 when Congress ended its inflation indexing. The per-participant cap, however, continues to rise and now stands at $751. For a well-funded plan with 10,000 participants, the minimum annual PBGC flat-rate bill is $1.11 million before any variable-rate charges. That is pure cost with no corresponding benefit improvement for the sponsor.

This is where buy-ins create a specific economic advantage. A buyout eliminates PBGC premiums entirely for the transferred population because participants exit the plan. A buy-in does not reduce participant count, so the flat-rate premium continues. However, because the buy-in annuity contract is an admitted plan asset that precisely matches the covered liabilities, the unfunded vested benefits for the covered segment fall to zero. The variable-rate premium for those participants drops accordingly.

For a plan at 100 percent funded status with no UVB, the PBGC cost difference between buy-in and buyout is limited to the flat-rate premium. But for a plan at 95 percent funded on a PBGC basis, the variable-rate savings from a buy-in covering the most underfunded tranche can be substantial. The interplay between flat-rate, variable-rate, and the per-participant cap creates a non-linear optimization problem that actuaries are increasingly asked to model across the full spectrum of transaction structures.

Funded Status: The Window That Sponsors Are Protecting

The current funded-status environment is the necessary condition for the buy-in surge. Plans cannot execute PRT transactions, whether buy-in or buyout, from a position of deep underfunding. The Milliman 100 Pension Funding Index shows why 2025 and early 2026 represent a historically favorable window.

At year-end 2025, the Milliman 100 aggregate funded ratio stood at 108.1 percent, up from 103.6 percent at year-end 2024. The aggregate surplus reached $98 billion, with market value of assets at $1,318 billion against a projected benefit obligation of $1,219 billion. The 2025 annual return on plan assets was 11.32 percent, well above the typical 6.5 to 7 percent assumed return. The discount rate at year-end was 5.46 percent, down modestly from 5.59 percent at year-end 2024.

WTW's Fortune 1000 aggregate showed 104 percent funding at year-end 2025, while Mercer's S&P 1500 index registered 110 percent. Multiemployer plans reached an aggregate 103 percent funded status, the highest in 20 years, according to data cited by Nationwide.

Milliman's base case projection for year-end 2026 is a $121 billion surplus at 110 percent funding, rising to $143 billion and 111.9 percent by year-end 2027. These projections assume equity returns near historical median and a discount rate range of 5.3 to 5.5 percent. If realized, the multi-year window of above-100 percent funding gives sponsors time to execute phased buy-in strategies rather than rushing into single large buyout transactions.

That window is not guaranteed. As our retirement and pension outlook analysis noted, a credit spread widening of 100 basis points would reduce funded ratios by roughly 3 to 5 points across the index. The buy-in's appeal in this context is that it locks in the current funded-status advantage for a specific participant cohort without committing the full plan to an irrevocable termination that could be disrupted by an interim market shock.

The UK Market: Larger Scale, Same Structural Shift

The US buy-in trend is not isolated. The UK bulk annuity market, which runs significantly larger relative to the underlying pension universe, is experiencing the same compositional evolution at greater scale.

Lane Clark & Peacock projects 2026 UK buy-in volume in the range of 40 billion to 55 billion pounds. The upper bound would surpass the previous record of 49.1 billion pounds set in 2023. WTW's competing forecast is even more aggressive, projecting 70 billion pounds in total UK pension risk transfer for 2026, with bulk annuities exceeding 50 billion pounds and longevity swaps contributing up to 20 billion pounds.

Three structural features differentiate the UK market from the US:

Insurer consolidation is accelerating. Three of the UK's eleven bulk annuity insurers announced acquisitions by international investors during 2025: Pension Insurance Corporation by Athora, Just Group by Brookfield (analyzed in detail in our Brookfield-Just close coverage), and Utmost's life and pensions division by JAB Insurance. All three closings were expected in the first half of 2026. The consolidation concentrates capacity in fewer, larger, and increasingly private-capital-backed hands.

The PPF levy has been eliminated. The UK Pension Protection Fund, the equivalent of the PBGC, charged zero levy for 2025/26, saving DB schemes approximately 45 million pounds collectively. PPF Chair Kate Jones described the move as a "significant milestone on our journey to financial self-sufficiency." Where PBGC premiums continue to rise annually through statutory indexing, creating an escalating cost that incentivizes de-risking, the UK has moved in the opposite direction. UK buy-in activity is driven more by liability management and sponsor risk appetite than by premium avoidance.

Member transition volumes are rising sharply. LCP projects that approximately 150,000 members will move through buyout and receive individual annuity policies in 2026, a threefold increase from 2024. The operational complexity of converting buy-in contracts to buyout, including GMP equalization, data cleansing, and regulatory approvals, creates a natural bottleneck that favors buy-in as the initial transaction structure with buyout conversion following over 12 to 24 months.

Carrier Capacity and the 23-Carrier Competitive Landscape

Paula Cole, vice president of Nationwide's pension risk transfer business, confirmed that the number of US PRT carriers has more than doubled in the past decade, reaching 23 at year-end 2025. That expansion changes the competitive dynamics for both buy-in and buyout pricing.

More carriers competing for the same deal flow compresses annuity purchase costs, which showed up clearly in the Milliman April 2026 PBI's drop to 101.1 percent competitive-bid cost. But the capacity concentration effect is equally important: in Q4 2025, just seven buy-in contracts absorbed $12.7 billion in premium. The average buy-in transaction size of roughly $1 billion means that only a subset of the 23 carriers has the surplus, the asset origination capability, and the actuarial infrastructure to compete on billion-dollar buy-in deals.

Corebridge Financial, the former AIG Life & Retirement division, illustrates the carrier model. With over 35 years in PRT and 60-plus professionals dedicated to the business, Corebridge offers buy-in, buyout, and lift-out structures with a minimum transaction size of $1 million and capacity extending into the billions. Their buy-in product is explicitly positioned as a stepping stone: sponsors can execute a buy-in covering retirees in pay, then convert that contract to a buyout when the remaining plan population is ready for full termination.

Nationwide expects "another slow year for the PRT industry, with sales coming in flat or potentially below 2025," but that forecast applies primarily to aggregate buyout volume. Cole confirmed that "activity significantly increased in the buy-in market in 2025, and we anticipate that trend will continue in 2026." Nationwide's economics team projects the Fed will resume rate cuts by mid-year, lowering the federal funds rate by 50 basis points by year-end 2026, which would modestly increase annuity purchase costs and potentially accelerate sponsor decisions to lock in current pricing through buy-ins.

The Actuarial Role in Buy-In Transactions

Buy-in transactions create a distinct set of actuarial challenges that differ from traditional buyout pricing in several respects.

Assumption-setting for buy-in pricing. In a buyout, the insurer assumes the full demographic and financial risk, and the pricing actuary builds the annuity purchase rate from the insurer's own mortality tables, expense assumptions, and investment return expectations. In a buy-in, the plan's actuary must evaluate the insurer's pricing against the plan's own actuarial assumptions to determine whether the buy-in premium represents fair value as a plan asset. This requires a comparative analysis of the plan's mortality basis (often RP-2014 with MP-2025 improvement scales) against the insurer's proprietary table, as well as a view on how the insurer's investment strategy will generate the returns implicit in the annuity pricing.

Asset-liability matching analysis. Post-buy-in, the plan's asset portfolio has a fundamentally different risk profile. The buy-in contract is a fixed-income-like asset that perfectly matches the covered liabilities. The remaining plan assets, covering participants not included in the buy-in, need to be rebalanced to reflect the changed duration and risk profile of the residual obligation. The pension actuary and investment consultant must coordinate to avoid either a duration mismatch or an unintended increase in equity allocation relative to the remaining liability.

Insurer credit quality due diligence. The American Academy of Actuaries' Pension Committee has highlighted that state insurance guaranty association coverage, which ranges from $100,000 to $500,000 depending on the state, may fall below PBGC coverage levels for certain participants. In a buy-in, the plan retains the liability and the insurer's obligation flows through the plan, creating a layered credit structure. The actuary should evaluate insurer financial strength ratings, RBC ratios, and the concentration risk of placing a large buy-in with a single carrier, particularly given the private-equity ownership changes rippling through the market.

The emerging NAIC C-2 longevity charge. The NAIC Longevity Risk (E/A) Subgroup is developing a C-2 RBC charge that separates retained and ceded longevity exposure, with a year-end 2027 target effective date. As covered in our C-2 longevity risk analysis, the framework includes a retained scenario stress and a ceded counterparty factor table. For carriers writing buy-in business, the new charge will directly affect the capital backing required, with modeling implications for how buy-in pricing evolves once the charge takes effect.

Fiduciary considerations under DOL IB 95-1. The Department of Labor's Interpretive Bulletin 95-1 establishes the fiduciary standards that plan sponsors must meet when selecting an annuity provider for PRT. While the bulletin was written primarily with buyouts in mind, the fiduciary duty to act in participants' best interest applies equally to buy-in transactions. The ASPPA panel featuring experts from Aon, Prudential, and the Connecticut Insurance Department emphasized that data integrity is "the most critical" factor in successful PRT execution, with underpricing risks to insurer solvency creating a long-tail fiduciary concern that actuaries must document.

The Plan Sponsor Decision Framework for 2026

For a corporate plan sponsor with a funded ratio above 105 percent and an active pension committee, the 2026 decision framework has become more complex than the binary "keep the plan open or buy it out" choice of a decade ago. The current menu includes:

Buy-in on the retiree population. Lowest-cost entry point, tightest mortality assumption bands, cleanest pricing. Locks in current annuity purchase rates for the most predictable cohort. Preserves the plan and all associated administrative infrastructure.
Phased buy-in to buyout. Execute a retiree buy-in in 2026, convert to buyout in 2027 or 2028 when the remaining active and deferred populations are ready. The conversion triggers settlement accounting only at the final buyout stage.
Full buyout with plan termination. Removes all pension obligations permanently. Highest upfront cost, including the IRS Section 4980 excise tax on surplus reversions if the plan is overfunded beyond the termination threshold. Eliminates all future PBGC premiums, administrative costs, and actuarial fees.
Longevity swap. Transfers longevity risk only, without transferring investment risk or administrative responsibility. Typically executed with reinsurers rather than direct PRT carriers. The UK market saw up to 20 billion pounds in longevity swap volume projected for 2026 (WTW estimate), while the US longevity swap market remains nascent.
Lump sum window followed by buy-in. Offer lump sums to terminated vested participants under IRC Section 417(e) rules to reduce head count and PBGC premiums, then execute a buy-in on the remaining retiree population. As our Section 417(e) segment rate analysis showed, rising rates are repricing lump sums 4 to 6 percent lower, reducing the cost of this approach but also reducing participant take-up rates.

The optimal strategy depends on the plan's specific funded-status trajectory, the sponsor's appetite for income statement volatility, the size and demographic composition of the participant population, and the sponsor's timeline for exiting the pension obligation entirely. What has changed in 2026 is that the buy-in has moved from a niche structure used by the largest plans to a mainstream first step, with 17 transactions totaling $17.5 billion confirming that the market infrastructure exists to support billion-dollar buy-ins on a routine basis.

Why This Matters for Actuaries

The buy-in compositional shift creates several direct consequences for pension actuaries, consulting actuaries, and life insurance actuaries on both sides of the transaction.

First, the demand for buy-in pricing analysis is structurally higher than the demand for buyout pricing analysis, because buy-ins require ongoing actuarial engagement. A buyout closes the book. A buy-in requires annual valuation of the annuity contract as a plan asset, periodic review of the insurer's credit quality, and updated liability projections for the uncovered population. For consulting actuaries, buy-in growth means longer client engagement cycles and recurring revenue that buyouts do not produce.

Second, on the insurer side, the capital deployment pattern changes. Buy-in contracts create a liability that the insurer prices against its own investment portfolio, but the contracts can be converted to buyout at a later date, introducing option-like exposure into the insurer's actuarial projections. The forthcoming NAIC C-2 longevity charge will require carriers to hold explicit capital against the retained longevity risk in their buy-in blocks, a charge that does not exist today.

Third, the growth of 23 carriers competing for PRT business means more actuarial positions at PRT-focused insurers. Corebridge's 60-plus dedicated PRT professionals are not unusual; every major PRT carrier maintains a specialized actuarial team for pricing, reserving, and asset-liability management on pension blocks. The expansion of buy-in as a product category creates incremental staffing demand at each carrier that adds the structure to its product shelf.

Fourth, the UK and US markets are increasingly interconnected through common carrier ownership. Brookfield's acquisition of Just Group, Athora's acquisition of PIC, and the cross-border reinsurance arrangements that back many PRT contracts mean that pricing, mortality assumption, and capital allocation decisions in one market have read-across effects in the other. Actuaries working in either market need a working understanding of both regulatory regimes, a convergence that the data on both sides of the Atlantic now confirms.