US Pension Risk Transfer Market Begins 2022 in Record Fashion

Transaction volume rises more than 44% compared to same quarter last year

STAMFORD, CT / BUSINESSWIRE / May 5, 2022 Legal & General Retirement America (LGRA), a leading provider of pension risk solutions in the US, today released its Q1 Pension Risk Transfer Monitor, providing an overview of industry trends for the first three months of 2022.

After a record breaking 2021, the first three months of the new year continued apace. Estimated at $5.5 billion, Q1 2022 is the largest first quarter to date and considerably higher than Q1 2021 ($3.8 billion) and Q1 2020 ($4.5 billion). Last quarter’s volume was driven by two large deals of more than $1 billion each.

“The PRT market is experiencing breakaway growth amid a turbulent economy, providing further evidence of the value and resilience of this risk management solution,” said George Palms, LGRA President. “At a time when the markets remain volatile and economic conditions continue to change, PRT transactions can be an effective option to mitigate plan sponsors’ risk and improve benefit security for plan members.”

The Monitor found that plan termination activity dominated the market in Q1, representing 60% of deals transacted by premium. The remainder were lift-outs.

The Monitor also cited funding levels amongst corporate defined benefit plans, which have been on the rise of late. Clocking in at 96.3% in Q1, according to LGIM America’s March 2022 Pension Solutions Monitor, funding status is notable as it’s associated with a rise in PRT transaction volume.

The complete Q1 US PRT Monitor can be found here.

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