The US pension risk transfer (PRT) market took a significant hit in the second quarter of 2025, with new premiums plunging 64% to just $4.1 billion, according to LIMRA’s latest Group Annuity Risk Transfer Sales Survey. This sharp decline is part of a broader slowdown that has seen a 56% drop in total PRT sales for the year so far, compared to the same period in 2024.
Fewer deals are happening overall. Only 138 contracts were sold in the second quarter, a 30% drop from last year. For the first half of 2025, 252 contracts were sold, down 24% from the prior year. Experts suggest this slump is partly due to volatile economic conditions, concerns about ongoing litigation, and the absence of any large, jumbo deals during the quarter.
Keith Golembiewski, assistant vice president and head of LIMRA Annuity Research, points out that even with these challenges, employers are still looking for ways to cut down pension liabilities. Notably, 38% of the second-quarter sales were retiree-only carve-outs, where only specific groups of retirees are transferred instead of the entire pension plan.
Breaking down the numbers further, single-premium buy-out sales — where a company transfers its pension liabilities to an insurer — fell 60% to $3.7 billion during the second quarter. The number of buy-out contracts dropped 33%, with 122 sold compared to the prior year. Year-to-date, buy-out premium sales stand at $10.6 billion, down 54%.
Buy-in contracts, which cover a portion of the pension plan’s liabilities without fully transferring them, saw even steeper declines. The second quarter had just three small buy-in contracts totaling $263.2 million, an 86% drop in premium amounts. For the first six months of 2025, buy-in sales were $404.8 million, down 82% compared to the same period in 2024.
Despite the slowdown in sales, the overall assets held in single-premium buy-out policies grew by 10% year-over-year to reach $307 billion. Buy-in assets fell 27% to $6.3 billion, while total PRT assets combined reached $343.4 billion, reflecting a 7% increase from the previous year.
Regionally, the Southern US remains the strongest market for pension risk transfers. This is largely because the area hosts many Fortune 500 companies and has growing sectors like healthcare, hospitality, and leisure, which keep demand relatively steady even as the overall market dips.
The way companies handle these transfers is also changing. More than 63% of the market now consists of lift-outs, where sponsors transfer risk for specific retiree groups instead of their whole plan. This approach helps companies reduce risk without fully terminating their pension plans.
Smaller companies are becoming an important part of the market’s growth story. The group shows the fastest growth rate, expanding about 13.65% annually. Factors like regulatory changes, more competition among insurers, and tailored solutions for smaller employers are making pension risk transfer options more accessible to these businesses.
While 2025 sales are expected to fall short of the record set last year, industry leaders remain hopeful that increasing interest from plan sponsors and more carriers entering the market will revive growth in the coming years. For now, the PRT market faces a challenging stretch amid economic uncertainties and cautious buyers.