Legal & General Retirement America Estimates Over $4 Billion in Total Volume for US Pension Risk Transfer Market in Q1

Latest PRT Monitor Reveals Large-Sized Deals Are Gaining Momentum As Interest Rates Are on the Rise

STAMFORD, CT / ACCESSWIRE / May 13, 2021 / Legal & General Retirement America (LGRA) today released its latest Pension Risk Transfer (PRT) Monitor, a quarterly report that highlights market updates, trends and outlooks, which estimates the total volume for the U.S. PRT market to be more than $4 billion in Q1. Volume reflects a similar start to 2020, which saw $4.5 billion in Q1.

The PRT Monitor indicates that plan terminations are once again leading retiree lift-outs both by premium and count, representing approximately 71% of the deals closed from January through March 2021. JCPenney’s $2.8 billion plan termination in March represents a large portion of that percentage.

LGRA also points out two emerging key market trends:

• An increase in larger-sized deals: Through the first quarter, several deals over $500 million have come to market, adding potentially $8 billion to the pipeline for 2021.
• Rising rates: U.S. Treasury rates have been steadily rising since July 2020. Funding levels generally improve as interest rates rise, which could encourage more plan sponsors to execute a PRT transaction.

“We are starting to see transactions that were placed on hold by plan sponsors in 2020 resume, leading to continued momentum in early 2021,” said George Palms, president of LGRA. “Though still early, the increase in larger deals paired with rising interest rates and continued economic recovery are signals that we could be headed toward a monumental year for the pension risk transfer market.”

The complete Q1 PRT Monitor can be found here.

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